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Assume the economy is initially in equilibrium with real GDP equal to potential GDP. Other things equal, if the economy enters a recession, the inflation
Assume the economy is initially in equilibrium with real GDP equal to potential GDP. Other things equal, if the economy enters a recession, the inflation rate would ________and the output gap would ________ if there are, as opposed to are not, automatic stabilizers in the economy.
A.
decrease more; decrease more
B.
not change; not change
C.
decrease less; decrease less
D.
decrease more; decrease less
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