If GDP Is ________ Potential Output, Adjustment to the Long-Run

question 45

Multiple Choice

If GDP is ________ potential output, adjustment to the long-run equilibrium requires that output falls and prices ________.

• A) above; rise
• B) above; fall
• C) below; rise
• D) below; fall

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Definitions:

Time Period

A specific interval of time marked by a start and end point, often used for purposes of study, assessment, or to denote durations.

Offeree

In contract law, the person to whom an offer is made.

Illusory Promise

A promise that does not obligate the promisor to anything.

Legally Enforceable Promise

A commitment or agreement that is recognized by law and can be upheld in a court of justice.