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Suppose the economy is at full employment and firms become pessimistic about the future profitability of new investment. Which of the following will happen in
Suppose the economy is at full employment and firms become pessimistic about the future profitability of new investment. Which of the following will happen in the short run?
a. Output will decline.
b. Prices will decline.
c. Unemployment will increase.
d. All of the options are correct.
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