An economy's long-run equilibrium is
A) the equilibrium that would occur if prices were perfectly flexible.
B) the equilibrium that would occur if prices were perfectly flexible and always adjusted immediately.
C) the equilibrium that would occur if prices were perfectly flexible and always adjusted immediately to preserve full employment.
D) the equilibrium that would occur if prices were perfectly fixed to preserve full employment.
E) the equilibrium that would occur if prices were perfectly fixed at the full employment point.
C
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A typical supply curve has
a. slope equal to zero. b. slope equal to infinity. c. negative slope. d. positive slope. e. constant slope.
Persistently expansionary monetary policy that stimulates aggregate demand and leads to inflation will
a. lead to higher rates of real output in the long run. b. fail to increase real output once decision makers fully anticipate the inflation. c. lead to lower nominal interest rates once decision makers fully anticipate the inflation. d. permanently reduce the rate of unemployment below its natural rate.