Question

An economy has a recessionary gap.

With no change in aggregate​ demand, how does the economy return to full​ employment?

A.

The money wage rate​ rises, real GDP​ increases, and the price level falls.

B.

The money wage rate​ rises, real GDP​ decreases, and the price level rises.

C.

The money wage rate​ falls, aggregate supply​ increases, and the price level falls.

D.

The money wage rate​ falls, real GDP​ increases, and the price level rises.