The level of potential GDP
A. increases when the inflation rate rises.
B. rises and falls with the business cycle.
C. determines the location of the long-run aggregate supply curve.
D. changes when cyclical unemployment changes.
Answer:C
The level of potential GDP
A. increases when the inflation rate rises. B. rises and falls with the business cycle. C. determines the location of the long-run aggregate supply curve. D. changes when cyclical unemployment changes.