Suppose That You Have the Following Information About the Economy,where

question 135

Multiple Choice

Suppose that you have the following information about the economy,where all figures are in millions of dollars:
Full employment output = $2,000
Consumption = $1,200
Investment = $400
Government spending = $500
Net exports = -$200
Because short-run output is ________ full employment output,in the long run we would expect the price level to ________.

• A) less than; rise
• B) less than; fall
• C) greater than; rise
• D) greater than; fall
• E) equal to; remain unchanged