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Ceteris Paribus,if Current Output Has Fallen Below Potential ________

Question 3

Multiple Choice

Ceteris Paribus,if current output has fallen below potential ________.


A) a positive inflation gap will ensue
B) it is likely that the equilibrium real rate has fallen below the policy rate
C) a negative unemployment gap will ensue
D) it is likely that the equilibrium real rate has risen above the policy rate
E) none of the above

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