In the Long Run, Under What Circumstances Would the Economy

question 135

Multiple Choice

In the long run, under what circumstances would the economy produce at potential output?  

• A) if workers mistakenly believe that nominal wages equal real wages 
• B) if expectations are the same in the long run and in the short run 
• C) if wages and prices are sufficiently flexible 
• D) if the price level is high

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Definitions:

High Fear

An intense emotional state caused by a perceived imminent threat or danger.

Tendencies to Affiliate

A psychological phenomenon where individuals are inclined to connect, form relationships, or associate with others.

Electric Shocks

A sudden discharge of electricity through a part of the human body, used in various contexts, including medical therapy and psychological experiments.

Relationship Development

The process through which interpersonal connections evolve, characterized by increasing intimacy and commitment.