Advocates of the active approach argue that even when there is a large contractionary gap,
a. the downward renegotiation of wages necessary to increase the short-run aggregate supply curve and real output may take a long time, and during this period of adjustment the public bears a high cost in terms of foregone economic output.
b. the upward renegotiation of wages necessary to decrease the short-run aggregate supply curve and real output may take a long time, and during this period of adjustment the public bears a high cost in terms of foregone economic output.
c. the upward renegotiation of wages necessary to decrease the short-run aggregate supply curve and real output may take a long time, and during this period of adjustment the public bears a high cost in terms of foregone economic output.
d. the downward renegotiation of wages necessary to decrease the short-run aggregate supply curve and real output may take a long time, and during this period of adjustment the public bears a high cost in terms of foregone economic output.
a
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