When the price level is rising and simultaneously real GDP is decreasing,
A. the natural unemployment rate increases.
B. stagflation occurs.
C. there is an expansionary gap.
D. the Fed has increased the discount rate.
Answer:B
When the price level is rising and simultaneously real GDP is decreasing,
A. the natural unemployment rate increases. B. stagflation occurs. C. there is an expansionary gap. D. the Fed has increased the discount rate.