A decline in consumer confidence will O cause output to fall and the price level

Question

A decline in consumer confidence will O cause output to fall and the price level to rise. O cause output to rise and the price level to rise. O cause output to fall and the price level to fall. O cause output to rise and the price level to rise. Question 11 When actual real GDP is above potential output, the unemployment rate is above the natural rate. O actual inflation is most likely above expected inflation. O the unemployment rate is below the natural rate. O actual inflation is most likely below expected inflation. B andC O A and D

Explanation / Answer

1. C. Cause output to fall and the price level to fall, a decline in consumer confidence lowers aggregate demand,which lead to fall in prices and fall of consumption/ output.

2. B&C, unemployement rate will be below natural rate and actual inflation is above expected inflation.

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