If Wages Adjust Fully to Price Increases in the Long

question 66

Multiple Choice

If wages adjust fully to price increases in the long run, fiscal policy will

• A) have no affect on the price level.
• B) have no affect on output.
• C) have no affect on either output or the price level.
• D) affect both output and the price level.

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Definitions:

North American Free Trade Agreement

A trilateral trade agreement between the United States, Canada, and Mexico aimed at eliminating tariffs and reducing trade barriers.

Cross-Border Trade

International trade involving the exchange of goods, services, and capital across national borders.

Cross-Border Trade

The exchange of goods or services between individuals, companies, or governments from different countries.

Mexican Business Environment

The economic, cultural, and regulatory context within which businesses operate in Mexico.