Exhibit 11-2 -In Exhibit 11-2, If P₃ Is the Prevailing Price Level

question 20

Multiple Choice

Exhibit 11-2
-In Exhibit 11-2, if P₃ is the prevailing price level, then

• A)the expected price level is less than the actual price level
• B)there is a contractionary gap
• C)the price level will rise
• D)the actual unemployment rate is above the natural rate
• E)potential output is greater than actual output

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