If Output Is Below the Natural Rate, Output Eventually Rises

question 69

True/False

If output is below the natural rate, output eventually rises due to a fall in the price level and shift of LM to the right.

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Definitions:

Manufacturing Firms

Companies involved in the transformation of raw materials, components, or parts into finished goods that meet a consumer's demand or specifications.

Unionized Workers

Employees who are members of a union, a group that negotiates with employers for better wages, benefits, and working conditions.

Minimum Wage

Minimum wage is the lowest legal remuneration that employers are allowed to pay their workers, established by government laws.

Quantity Demanded

The total amount of a good or service that consumers are willing to buy at a given price level in a given period.