Starting from a Long-Run Equilibrium,an Increase in Potential Output Leads

question 126

Multiple Choice

Starting from a long-run equilibrium,an increase in potential output leads to _________ gap in the short run and to ________ rates of inflation in the long run.

• A) an expansionary;higher
• B) an expansionary;lower
• C) no output;higher
• D) a recessionary;higher
• E) a recessionary;lower