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At Long-Run Equilibrium, Inflation _______ and Actual Output Equals ______

Question 18

Multiple Choice

At long-run equilibrium, inflation _______ and actual output equals ______.


A) equals the value determined by past expectations and pricing decisions; potential
B) equals the value determined by past expectations and pricing decisions; the level of short-run equilibrium output consistent with that inflation rate
C) equals the value consistent with potential output; the level of output consistent with zero inflation
D) is stable; potential output

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