The long-run model determines ________ output and ________.
A) current; unemployment
B) potential; unemployment
C) current; long-run inflation
D) potential; potential inflation
E) potential; long-run inflation

Question

Quizplus · Accepted Answer

The long-run model in economics is used to determine potential output and long-run inflation. Potential output refers to the level of output (GDP) that an economy can produce when it is operating at full capacity, without generating inflationary pressures. Long-run inflation refers to the rate of inflation that the economy experiences over a long period, which is influenced by factors like monetary policy and the rate of growth in the money supply.

The Long-Run Model Determines ________ Output and ________

The Long-Run Model Determines Output and