Other things being equal, along an aggregate demand curve, a higher price level is associated with
A) a lower nominal GDP. B) a higher real GDP.
C) higher income levels. D) a lower real GDP.
Question 2
Why is there NO persistent unemployment in the classical model?
A) Unionization creates job security for workers.
B) The wage level adjusts to eliminate unemployment.
C) The interest rate adjusts to eliminate unemployment.
D) The rate of economic growth is always high enough to allow those who want to work at current wages to find jobs.
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