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Given the Existence of Short-Run Trade-Offs Between Inflation and Unemployment

Question 42

Multiple Choice

Given the existence of short-run trade-offs between inflation and unemployment, short-run GDP can be expected to increase if


A) aggregate demand falls.
B) aggregate demand rises.
C) potential GDP increases because the labor supply has increased.
D) potential GDP increases because of some technological improvement.
E) potential GDP increases because of an increase in the capital stock.

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