Which of the following statements is true?
A) If current Real GDP is greater than Natural Real GDP, the economy is in a recessionary gap.
B) If current Real GDP is less than Natural Real GDP, the economy is in long-run equilibrium.
C) Wages are flexible if the economy is self-regulating.
D) Wages rise but prices remain constant in long-run equilibrium.
E) All economists believe the economy is self-regulating.
C
You might also like to view...
When GDP = $2.5 trillion, C = $1.0 trillion, I = $0.6 trillion, G = $0.4 trillion, and NX = $0. Then
A) unplanned inventory change = -$0.5 trillion. B) equilibrium expenditure = $2.0 trillion. C) aggregate planned expenditure = $1.6 trillion. D) unplanned inventory change = $0.5 trillion. E) aggregate planned expenditure = $2.5 trillion.
As the price of an existing bond increases,
A. The current yield decreases. B. There is increased risk that the U.S. Treasury will default on the bond. C. The coupon rate decreases. D. The par value decreases.