A macroeconomic equilibrium occurs when the A) quantity of ...

[tichca]

A macroeconomic equilibrium occurs when the
 
  A) quantity of real GDP demanded is greater than the quantity of real GDP supplied.
  B) quantity of real GDP demanded equals the quantity of real GDP supplied and both equal potential GDP.
  C) quantity of real GDP demanded equals the quantity of real GDP supplied even if they are not equal to potential GDP.
  D) quantity of real GDP demanded is less than the quantity of real GDP supplied.
  E) None of the above answers is correct.

Question 2

The bias in the CPI distorts private contracts because a future payment that is linked to the CPI will be raised above the true increase in the price level. Is the previous sentence true or false?
 
  What will be an ideal response?

[frejo]

Answer to Question 1

C

Answer to Question 2

The sentence is correct. The fact that the payments increase by more than the true increase in the price level means that one party to the contract benefits more, the higher the inflation rate.

[tichca]

Correct answers!

[frejo]

Great! Please up vote