If real GDP is greater than potential GDP,
A) the rate of inflation will not change.
B) the price level will not change.
C) the rate of inflation will decrease.
D) the price level will fall.
E) the rate of inflation will increase.
Correct Answer:
Verified
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
Q148: If real GDP is less than potential
Q149: When real GDP is above potential GDP,
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
Q154: The inflation adjustment line IA will shift
Q155: Changes in aggregate demand can cause inflation
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