The equilibrium level of GDP is the level at which
a. aggregate demand exceeds output.
b. aggregate demand equals output.
c. aggregate demand is less than output.
d. inventories are being depleted to meet demand.
b
Economics
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Refer to Figure 26-7. Suppose the economy is in short-run equilibrium above potential GDP, the unemployment rate is very low, and wages and prices are rising
Using the static AD-AS model in the figure above, the correct Fed policy for this situation would be depicted as a movement from A) A to B. B) B to C. C) C to D. D) C to B. E) A to E.
Economics
An added benefit of inflation is that it allows for the possibility of
a. menu costs. b. aggregate supply shocks. c. negative real interest rates. d. recessions.
Economics