Which of the Following Statements Is True of the Economy

question 146

Multiple Choice

Which of the following statements is true of the economy in the long run? In the long run,
I. real GDP eventually moves to potential output because all wages and prices are assumed to be flexible.
II. the economy can achieve its natural level of employment and potential output at any price level.
III. there is no cyclical unemployment.

• A) I only
• B) I and II only
• C) I and III only
• D) I, II, and III

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