Which of the following is true A A recessionary gap can be c

Which of the following is true?

A. A recessionary gap can be closed completely because of sticky wages.

B. Theoretically, an inflationary gap can eventually lead to stagflation.

C. Wages increase in the time of recession for reasons such as minimum wages, union contacts, and government restrictions.

D. a and b.

Solution

Solution: Wages increase in the time of recession for reasons such as minimum wages, union contacts, and government restrictions.

Explanation: Because policymakers targets to aid low-skilled workers during recessions thus during recession minimum wages, union contacts, and government restrictions results to an increase in wages