Which of the following occurs when an expansionary gap is closed in the long run by the action of firms? a. Inflation decreases, and unemployment rises. b. Both the equilibrium output and the price level decrease. c. Both the equilibrium output and the price level increase. d. Output decreases, and the price level increases. e. Inflation rises, and unemployment decreases

Which of the following occurs when an expansionary gap is closed in the long run by the action of firms? a. Inflation decreases, and unemployment rises. b. Both the equilibrium output and the price level decrease. c. Both the equilibrium output and the price level increase. d. Output decreases, and the price level increases. e. Inflation rises, and unemployment decreases

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter14: Aggregate Demand And Supply

Section14.A: The Self Correcting Aggregate Demand And Supply Model

Problem 3SQP

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