Suppose That the Current Price Level Is Equal to the Expected

question 9

Multiple Choice

Suppose that the current price level is equal to the expected price level. Given this information, we know with certainty that:

• A) the unemployment rate is equal to the natural rate of unemployment.
• B) only the goods market is in equilibrium.
• C) the goods market and financial markets are in equilibrium.
• D) the unemployment rate is zero.
• E) both the price level and the expected price level are equal to one.

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