In the long run, an economy will produce its potential output if: ...

[big1devin]

In the long run, an economy will produce its potential output if:
 a. workers mistakenly believe that nominal wages equal real wages.
 b. the expectations of workers and firms are the same in the long and short run.
  c. wages and prices are sufficiently flexible.
 d. the price level is high.
 e. the price level is low.

Question 2

Monetary policy will be effective in changing the gross domestic product of a nation only if:
 a. planned investment expenditures are autonomous.
 b. planned investment expenditures are sensitive to interest rates.
  c. interest rates are unresponsive to changes in money supply.
  d. interest rates are sensitive to changes in the price level.
 e. planned investment expenditures are sensitive to interest rates.

[Carissamariew]

Answer to Question 1

c

Answer to Question 2

b

[big1devin]

Thank you

[Carissamariew]

Happy to help you