The natural rate of output is the level of output where
A) the price level has no tendency to change.
B) money supply growth is zero.
C) fiscal policy cannot shift the IS curve.
D) all of the above.

Question

Quizplus · Accepted Answer

The natural rate of output is the level of output at which the price level has no tendency to change, meaning that the economy is in a state where inflation is stable, not necessarily zero, but not accelerating or decelerating. This concept does not directly relate to the money supply growth being zero or fiscal policy's inability to shift the IS curve.

The Natural Rate of Output Is the Level of Output