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While the Complete Model Does Not Formally Take Account of the Behavior

Question 24

Multiple Choice

While the complete model does not formally take account of the behavior of the labor market, the speed of adjustment of the labor market to its long-run equilibrium position is best accounted for by


A) the underlying determinants of potential GDP.
B) fiscal policies that counter recessions.
C) monetary policies that counter recessions.
D) the sensitivity of inflation to the GDP gap.
E) the level of expected inflation.

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