The flat inflation adjustment line reflects the idea that
A) inflation occurs only when real GDP exceeds potential GDP.
B) prices usually remain constant.
C) current prices and wages do not depend on what has happened in the past.
D) prices and wages are as likely to decline as they are to increase.
E) inflation is partly due to inertia.
Correct Answer:
Verified
Q153: The inflation adjustment line is horizontal because
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Q160: The inflation adjustment line is upward-sloping.
Q161: The intersection of the inflation adjustment line
Q162: Exhibit 24-6 Q163: Name three factors that cause the IA
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