The inflation adjustment line IA will shift down if
A) the local currency depreciates against foreign currencies.
B) real GDP rises above potential GDP.
C) real GDP falls below potential GDP.
D) All of the above
E) None of the above
Correct Answer:
Verified
Q149: When real GDP is above potential GDP,
Q150: If real GDP is greater than potential
Q151: Wage setting
A)is based only on wages expected
Q152: When real and potential GDP are equal,
A)prices
Q153: The inflation adjustment line is horizontal because
Q155: Changes in aggregate demand can cause inflation
Q156: Expectations of steady inflation and staggered wage
Q157: A firm expects inflation to remain at
Q158: The flat inflation adjustment line reflects the
Q159: A firm increases prices only if the
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