According to the Natural-Rate Hypothesis, the Levels of Output and Unemployment

question 1

Multiple Choice

According to the natural-rate hypothesis, the levels of output and unemployment depend on:

• A) aggregate demand in the short run, but not in the long run.
• B) aggregate demand in the long run, but not in the short run.
• C) the natural rate of unemployment in the short run, but the natural rate of inflation in the long run.
• D) the natural rate of inflation in the short run, but the natural rate of unemployment in the long run.

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Definitions:

Conscious

The state of being aware of and able to think about one's own existence, sensations, thoughts, surroundings, etc.

Reality

The state of things as they actually exist, as opposed to an idealistic or notional idea of them.

Repression

A psychological defense mechanism where distressing thoughts, memories, or impulses are excluded from consciousness.

Anxiety

A feeling of worry, nervousness, or unease, typically about an imminent event or something with an uncertain outcome.