If this is a closed economy, the price of a TV will be ________. 

When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.

A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline

Why is there NO persistent unemployment in the classical model?

A. The rate of economic growth is always high enough to allow those who want to work at current wages to find jobs. B. Unionization creates job security for workers. C. The wage level adjusts to eliminate unemployment. D. The interest rate adjusts to eliminate unemployment.