If all prices adjusted immediately to balance the quantities supplied and demanded for all goods and services output gaps would be positive more often than they would be negative. cyclical unemployment would be positive. potential GDP would rise much more quickly. output gaps would not exist.
If all prices adjusted immediately to balance the quantities supplied and demanded for all goods and services output gaps would be positive more often than they would be negative. cyclical unemployment would be positive. potential GDP would rise much more quickly. output gaps would not exist.
Chapter14: Aggregate Demand And Supply
Section14.A: The Self Correcting Aggregate Demand And Supply Model
Problem 2SQ
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Transcribed Image Text:If all prices adjusted immediately to balance the quantities supplied
and demanded for all goods and services
output gaps would be positive more often than they would be negative.
cyclical unemployment would be positive.
potential GDP would rise much more quickly.
output gaps would not exist.
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