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Retnec Retnec
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7 years ago
Assume that potential GDP is $1,000 billion. Suppose that the economy is presently in equilibrium at a price level of 120 and an output of $1,500 billion. According to the self-correcting model, the economy will
A) ultimately return to an output of $1,000 billion but at a price level less than 120.
B) will remain at an output of $1500 billion, but the price level will fall to something less than 120.
C) ultimately return to an output of $1,000 billion but at a price level greater than 120.
D) will remain at an output of $1500 billion, but the price level will rise above 120.
E) ultimately return to an output of $1,000 billion at a price level of 120.
Textbook 
Introduction to Economic Reasoning

Introduction to Economic Reasoning


Edition: 8th
Author:
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hecosmetichecosmetic
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