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Suppose that the economy is initially in general equilibrium. What would happen if the natural rate of unemployment were to increase? None of the above.
Suppose that the economy is initially in general equilibrium. What would happen if the natural rate of unemployment were to increase?
None of the above.
According to the AD/AS model framework, the resulting positive output gap would lead to higher inflation.
All of the above.
According to Okun's law, the resulting negative unemployment gap would be consistent with a positive output gap.
According to the Phillips curve, the resulting negative unemployment gap would increase inflationary pressure
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