The Economy Was in Long-Run Equilibrium When Aggregate Demand Increased

question 137

Multiple Choice

The economy was in long-run equilibrium when aggregate demand increased.At this point in time,the expected inflation has started to adjust to the new higher actual inflation rate.According to the (Friedman) natural rate theory,this means the unemployment rate in the economy must currently be

• A) decreasing.
• B) increasing.
• C) higher than it was in long-run equilibrium.
• D) equal to what it was in long-run equilibrium.
• E) There is not enough information to answer the question.

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Definitions:

Monitoring Task Accomplishments

The process of observing and recording the progress made on specific tasks within a project or operation.

Corrective Action

A process or an action taken to fix a detected problem or deviation from a set standard in an organization.

Uncertain Future

pertains to the unpredictability of events, developments, or outcomes in times ahead.

Performance Pressures

The demands or stress placed on individuals or organizations to achieve high levels of output or success.