Suppose the Economy Is Operating at a Point Where Output

question 46

Multiple Choice

Suppose the economy is operating at a point where output is less than the natural level of output. Which of the following statements is correct given this information?

• A) The employment rate is greater than the natural employment rate.
• B) The price level will be higher next period than this period.
• C) The price level is less than the expected price level.
• D) Workers will revise upwards price expectations.
• E) The unemployment rate is less than the natural unemployment rate.

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