If the economy is in long-run equilibrium,
A) prices will rise but wages will remain constant.
B) neither prices nor wages will change.
C) it is producing Natural Real GDP.
D) prices will remain constant but wages may rise.
E) b and c

Question

Quizplus · Accepted Answer

In long-run equilibrium, the economy is producing at its Natural Real GDP, meaning it is operating at its full potential without cyclical unemployment, and neither prices nor wages are expected to change because the economy is in a state of balance.

If the Economy Is in Long-Run Equilibrium