In the AD-AS framework, long-run equilibrium implies that ________
A) quantity demanded equals quantity supplied at a moderate level of equilibrium inflation
B) quantity demanded equals quantity supplied at a point consistent with the short-run equilibrium level of inflation
C) quantity demanded equals quantity supplied at a point consistent with the natural rate of unemployment
D) all of the above
E) none of the above
C
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Refer to Figure 11-18. Starting from point D, a movement along isoquant2 to point F
A) increases the total cost of production with no change in output. B) increases output but not the total cost of production. C) increases both the total cost of production and output. D) increases the total cost of production and decreases output.
The real interest rate is 4% a year. When the expected inflation rate is zero, the nominal interest rate approximately ... % a year; and when the expected inflation rate is 2% a year, the nominal interest rate is approximately ... % a year
What will be an ideal response?