If all prices adjusted immediately to balance the quantities supplied and demanded for all goods and services:
A)output gaps would not exist.
B)output gaps would be positive more often than they would be negative.
C)cyclical unemployment would be positive.
D)potential GDP would rise much more quickly.

Question

Quizplus · Accepted Answer

If prices adjusted immediately for all goods and services, inventories would stay at their desired level and output gaps would not exist.

If All Prices Adjusted Immediately to Balance the Quantities Supplied