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If the Short-Run IS-LM Equilibrium Occurs at a Level of Income

Question 133

Multiple Choice

If the short-run IS-LM equilibrium occurs at a level of income above the natural level of output, in the long run the ______ will ______ in order to return output to the natural level.


A) price level; increase
B) interest rate; decrease
C) money supply; increase
D) consumption function; decrease

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