The short-run model determines ________ and ________.
A) current output; current inflation
B) current output; long-run inflation
C) unemployment; current inflation
D) unemployment; potential output
E) potential output; unemployment

Question

Quizplus · Accepted Answer

The short-run model focuses on the relationship between current output and current inflation, as it assumes that prices and wages are sticky in the short-run. It does not consider long-run inflation or potential output directly, although these concepts may be indirectly affected by changes in current output and inflation. The model also does not focus solely on unemployment, although it is an important factor that can affect output and inflation in the short-run.

The Short-Run Model Determines ________ and ________

The Short-Run Model Determines and