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    Macroeconomics Policy and Practice
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    Exam 12: The Aggregate Demand and Supply Model
  5. Question
    An Economy Is in Long-Run Equilibrium When Output Equals Potential
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An Economy Is in Long-Run Equilibrium When Output Equals Potential

Question 80

Question 80

Essay

An economy is in long-run equilibrium when output equals potential output.Why is there no long-run equilibrium rate of "potential inflation"?

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Potential output is a real variable dete...

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