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Suppose the Economy Is Producing at the Natural Rate of Output

Question 69

Multiple Choice

Suppose the economy is producing at the natural rate of output. A decrease in consumer and business confidence will cause ________ in real GDP in the short run and ________ in inflation in the short run,everything else held constant.


A) an increase;an increase
B) a decrease;a decrease
C) no change;an increase
D) no change;a decrease

Correct Answer:

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