In the short-run, each of the following is true except
A) prices are sticky.
B) nominal wages are sticky.
C) real GDP fluctuates around potential output.
D) unemployment remains at its natural rate.

Question

Quizplus · Accepted Answer

In the short-run, unemployment does not necessarily remain at its natural rate due to economic fluctuations that can cause it to rise above or fall below this level. Choices A, B, and C are characteristics of the short-run economic behavior, where prices and nominal wages are sticky, and real GDP fluctuates around potential output.

In the Short-Run, Each of the Following Is True Except