Which of the following occurs when an expansionary gap is closed in the long run by the action of firms? a. Inflation decreases, and unemployment rises. b. Both the equilibrium output and the price level decrease. c. Both the equilibrium output and the price level increase. d. Output decreases, and the price level increases. e. Inflation rises, and unemployment decreases
Which of the following occurs when an expansionary gap is closed in the long run by the action of firms? a. Inflation decreases, and unemployment rises. b. Both the equilibrium output and the price level decrease. c. Both the equilibrium output and the price level increase. d. Output decreases, and the price level increases. e. Inflation rises, and unemployment decreases
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter24: The Aggregate Demand/aggregate Supply Model
Section: Chapter Questions
Problem 48CTQ: If households decide to save a larger portion of their income, what effect would this have on the...
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