Which of the following statements is true of the economy in the long run? In the long run,
I.real GDP eventually moves to potential because all wages and prices are assumed to be flexible.
II.the economy can achieve its natural level of employment and potential output at any price level.
III.there is no cyclical unemployment.

Question

Quizplus · Accepted Answer

In the long run, real GDP moves to potential due to flexible wages and prices, the economy can achieve natural employment and output at any price level, and cyclical unemployment is eliminated.

Which of the Following Statements Is True of the Economy