Which of the following statements is incorrect?
A)The point where the short-run and long-run supply curves intersect corresponds to the potential level of output
B)Any point on the short-run aggregate supply curve reflects current inflation equals actual inflation
C)Inflation and output are unrelated in the long run
D)In the long run, inflation is determined by monetary policy

Question

Quizplus · Accepted Answer

In the short-run aggregate supply curve, current inflation does not necessarily equal actual inflation; it reflects the relationship between output and inflation, where inflation can deviate from expectations.

Which of the Following Statements Is Incorrect