According to the Natural-Rate Hypothesis, the Levels of Output and Unemployment

question 1

Multiple Choice

According to the natural-rate hypothesis, the levels of output and unemployment depend on:

• A) aggregate demand in the short run, but not in the long run.
• B) aggregate demand in the long run, but not in the short run.
• C) the natural rate of unemployment in the short run, but the natural rate of inflation in the long run.
• D) the natural rate of inflation in the short run, but the natural rate of unemployment in the long run.