Suppose an economist believes the economy removes recessionary and inflationary gaps by itself. The following describes...

 

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Suppose an economist believes the economy removes recessionary and inflationary gaps by itself. The following describes what she thinks will happen when the economy is in a recessionary gap and it is illustrated by graph a. wages fall, and the SRAS curve shifts rightward, graph B. b. wages fall, and the SRAS curve shifts leftward, graph B C. wages rise, and the SRAS curve shifts leftward, Graph A d. wages fall, and the AD curve shifts rightward, Graph A. Price Level LRAS P2 Graph A SRAS AD2 AD Real GDP Recessionary gap LRAS SRAS ISRAS Real GDP Graph B AD Suppose an economist believes the economy removes recessionary and inflationary gaps by itself. The following describes what she thinks will happen when the economy is in a recessionary gap and it is illustrated by graph a. wages fall, and the SRAS curve shifts rightward, graph B. b. wages fall, and the SRAS curve shifts leftward, graph B C. wages rise, and the SRAS curve shifts leftward, Graph A d. wages fall, and the AD curve shifts rightward, Graph A. Price Level LRAS P2 Graph A SRAS AD2 AD Real GDP Recessionary gap LRAS SRAS ISRAS Real GDP Graph B AD