If an economy is at its potential output level, which of the following is not true?
A) The economy is at its full-employment output level.
B) Unemployment is at the natural level.
C) The price level is zero.
D) The output level being produced can be sustained indefinitely given the economy's resources and technology.
E) The only unemployment is frictional or structural.

Question

Quizplus · Accepted Answer

The price level cannot be zero in a market economy, as there are always costs associated with production and exchange. Therefore, choice C is the statement that is not true.

If an Economy Is at Its Potential Output Level, Which