Suppose that GDP lies above potential GDP. Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP? A. Aggregate supply will shift to the left. B. Unemployment will decline. C. Prices will decline. D. Output will increase
Suppose that GDP lies above potential GDP. Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP? A. Aggregate supply will shift to the left. B. Unemployment will decline. C. Prices will decline. D. Output will increase
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter8: Aggregate Demand And Aggregate Supply
Section: Chapter Questions
Problem 16QP
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Question
Suppose that
A.
B.
C. Prices will decline.
D. Output will increase.
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