Exhibit 10-2 -In Exhibit 10-2,if P₁ is the prevailing price level,then A)there is an expansionary gap B)the price level will decrease C)the expected price level is the same as the actual price level D)the unemployment rate is below the natural unemployment rate E)potential output is less than the actual level of output

Question

Quizplus · Accepted Answer

P₁ represents a point where the expected price level (PS) and the actual price level are the same, hence there is no inflationary or deflationary gap.

Exhibit 10-2 -In Exhibit 10-2,if P1 Is the Prevailing Price Level,then

Exhibit 10-2 -In Exhibit 10-2,if P₁ Is the Prevailing Price Level,then