An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.

The Friedman natural rate theory holds that there is an inverse relationship between inflation and unemployment in the long run, but not in the short run

Indicate whether the statement is true or false

The basic characteristic of the short run is that:

A. barriers to entry prevent new firms from entering the industry. B. the firm does not have sufficient time to change the size of its plant. C. the firm does not have sufficient time to cut its rate of output to zero. D. a firm does not have sufficient time to change the amounts of any of the resources it employs.