According to the Natural-Rate Hypothesis, Output Will Be at the Natural

question 41

Multiple Choice

According to the natural-rate hypothesis, output will be at the natural rate:

• A)if inflation exceeds expected inflation.
• B)if inflation falls below expected inflation.
• C)if inflation meets expectations in the short run.
• D)if aggregate demand affects output in the long run.

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Definitions:

Imports

Goods or services brought into a country from abroad for sale.

Equilibrium

A situation in a market where demand equals supply, and there is no tendency for the quantities supplied and demanded to change.

Market

The institution through which buyers and sellers interact and engage in exchange.

S And D

Stands for Supply and Demand, which are the forces that determine the price of goods and services in a marketplace.