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If Real GDP Is Below Potential GDP

Question 56

Multiple Choice

If real GDP is below potential GDP,


A) long-run equilibrium will be achieved once the aggregate demand curve shifts to the right.
B) the economy is in a short-run equilibrium.
C) long-run equilibrium will be achieved once inflation has stopped declining.
D) the economy is in a medium-run equilibrium.
E) long-run equilibrium will be achieved once prices have stopped declining.

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