The Natural Level of Output Is the Level of Output

question 50

Multiple Choice

The natural level of output is the level of output that occurs when:

• A) the unemployment rate is zero.
• B) the markup is zero.
• C) the economy is operating at the unemployment rate consistent with both the wage- setting and price- setting equations.
• D) both the goods and financial markets are in equilibrium.
• E) there are no discouraged workers in the economy.

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Definitions:

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