Solved

Picture an Economy That Is in General Equilibrium

Question 83

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:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions