Automatic mechanism adjusting the economy

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Reference no: EM131174102

Suppose the economy is at a short−run equilibrium GDP that lies above potential GDP. Which of the following will occur because of the automatic mechanism adjusting the economy back to potential? GDP?

A. Short−run aggregate supply will shift to the left.

B. Output will increase.

C. Unemployment will decline.

D. Prices will decline.

Reference no: EM131174102

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