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Starting from a Long-Run Equilibrium,an Increase in Potential Output Leads

Question 126

Multiple Choice

Starting from a long-run equilibrium,an increase in potential output leads to _________ gap in the short run and to ________ rates of inflation in the long run.


A) an expansionary;higher
B) an expansionary;lower
C) no output;higher
D) a recessionary;higher
E) a recessionary;lower

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