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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