To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:

A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.


Answer: C

Economics

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Answer the following statement true (T) or false (F)

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A group of buyers and sellers of a particular good or service is called a(n)

a. coalition. b. economy. c. market. d. competition.

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In the production function Real GDP = T (L, K), the T represents the _____________ coefficient, the L represents ________________ and the K represents _______________

A) tax; labor; capital B) technology; labor; capital C) technology; labor; knowledge D) technology; livestock; knowledge

Economics

Monetary policy has an:

A. unambiguous effect on exchange rates because the income, price, and interest rate effects offset one another. B. ambiguous effect on exchange rates because the income, price, and interest rate effects offset one another. C. unambiguous effect on exchange rates because the income, price, and interest rate effects reinforce one another. D. ambiguous effect on exchange rates because the income, price, and interest rate effects reinforce one another.

Economics