If an economy is at its potential output level,which of the following is not true?
A)The economy is at its full-employment output level.
B)Unemployment is at the natural level.
C)The price level is zero.
D)The output level being produced can be sustained indefinitely given the economy's resources and technology.
E)The only unemployment is frictional,structural,or seasonal.

Question

Quizplus · Accepted Answer

The price level cannot be zero in an economy at its potential output level. In fact, at potential output, there may still be some level of inflationary pressure due to strong demand for goods and services. Therefore, option C is not true.

If an Economy Is at Its Potential Output Level,which of the Following