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Expansions of Aggregate Demand Cause the Economy to Move Along

Question 73

Multiple Choice

Expansions of aggregate demand cause the economy to move along what is essentially a vertical aggregate supply curve when


A) wage increases catch up to inflation.
B) higher prices can reduce interest rates no further.
C) money supply growth rises to equal the rate of aggregate demand expansion.
D) from a recession level of output, full employment is reached.

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