Which of the Following Is Necessarily True When an Economy

question 170

Multiple Choice

Which of the following is necessarily true when an economy is in long-run equilibrium?

• A) Prices will be constant (that is, inflation will be zero).
• B) The actual output will be less than the full-employment (or potential) output.
• C) The actual rate of unemployment equals the natural rate of unemployment.
• D) The output of the economy will be greater than the full-employment output.

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Definitions:

Supreme Court Decision

A ruling issued by the Supreme Court, which is the highest court in many countries, setting a legal precedent.

Trust

A provision in equity whereby one person transfers property to a second person obligated to use it to the benefit of a third person.

Involuntary Assignment

Assignment of rights that takes place involuntarily, as in the cases of death and bankruptcy.

Equity Provision

A clause in an agreement that allows for adjustment based on the equity value of an entity or asset.