a. False. The long run potential growth rate always depends on low rates of inflation. b. True, but only sometimes. At very high rates of inflation, long run potential growth rate declines. C. False. When expected inflation is different from actual inflation, the potential growth rat suffers. d. True. The long run potential growth rate is determined by the factors of production, not prices.
a. False. The long run potential growth rate always depends on low rates of inflation. b. True, but only sometimes. At very high rates of inflation, long run potential growth rate declines. C. False. When expected inflation is different from actual inflation, the potential growth rat suffers. d. True. The long run potential growth rate is determined by the factors of production, not prices.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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
Transcribed Image Text:True or false? Regardless of the inflation rate,
a country has a set potential growth rate in
the long run.
a.
False. The long run potential growth rate
always depends on low rates of inflation.
b.
True, but only sometimes. At very high rates
of inflation, long run potential growth rate
declines.
C.
False. When expected inflation is different
from actual inflation, the potential growth rate
suffers.
d.
True. The long run potential growth rate is
determined by the factors of production, not
prices.
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