According to Friedman, in which of the following situations is the economy in long-run equilibrium?   a.  The expected economic growth rate is 3 percent and the actual inflation rate is 3 percent.     b.  The average inflation rate over the past five years is 2 percent and the expected inflation rate is 2 percent.     c.  The expected inflation rate is 3 percent and the actual inflation rate is 3 percent.     d.  The expected economic growth rate is 2 percent and the expected inflation rate is 2 percent.

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter24: The Aggregate Demand/aggregate Supply Model
Section: Chapter Questions
Problem 53CTQ: The AD/AS model is static. It shows a snapshot of the economy at a given point in time. Both...
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According to Friedman, in which of the following situations is the economy in long-run equilibrium?

  a. 

The expected economic growth rate is 3 percent and the actual inflation rate is 3 percent.

 
  b. 

The average inflation rate over the past five years is 2 percent and the expected inflation rate is 2 percent.

 
  c. 

The expected inflation rate is 3 percent and the actual inflation rate is 3 percent.

 
  d. 

The expected economic growth rate is 2 percent and the expected inflation rate is 2 percent.

 
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