Multiple Choice
Picture an economy that is in general equilibrium.What would happen if the natural rate of unemployment were to experience a decrease?
A) according to the Phillips curve,the ensuing negative unemployment gap would exert inflationary pressures
B) according to Okun's Law,the ensuing negative unemployment gap would be consistent with a positive output gap
C) according to the AD-AS framework,the LRAS curve would shift to the right and the ensuing output gap would have to be closed by subsequent rightward shifts in the AS curve to a lower equilibrium level of inflation
D) all of the above
E) none of the above
Correct Answer:

Verified
Correct Answer:
Verified
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