In the long run, output gaps are eliminated by:
A)reducing potential output.
B)increasing potential output.
C)price changes.
D)increased efficiency in labor markets.

Name: In the long run, output gaps are eliminated by: A)reducing potential output. B)increasing potential output. C)price changes. D)increased efficiency in labor markets.
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Question

Quizplus · Accepted Answer

As households and businesses change buying patterns, prices eventually must change to reflect the new demand for output.

In the Long Run, Output Gaps Are Eliminated By