If real GDP is less than potential GDP,
A) the price level will not change.
B) the rate of inflation will not change.
C) the rate of inflation will increase.
D) the rate of inflation will decrease.
E) the price level will fall.
Correct Answer:
Verified
Q143: Staggered price and wage setting means that
A)inflation
Q144: Staggered wage and price setting speeds up
Q145: Current price and wage behavior is dependent
Q146: The IA line will move down if
A)potential
Q147: If a firm expects the rate of
Q149: When real GDP is above potential GDP,
Q150: If real GDP is greater than potential
Q151: Wage setting
A)is based only on wages expected
Q152: When real and potential GDP are equal,
A)prices
Q153: The inflation adjustment line is horizontal because
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