Multiple Choice
Consider the AD/AS model with a constant rate of inflation.In this case,
A) there is no effective set of monetary policy tools to reduce inflation.
B) there is a tendency for the price of bonds to be increasing rapidly.
C) the AS curve is shifting upward because of inflation expectations.
D) expected inflation tends to be significantly less than actual inflation.
E) the AD curve is not shifting at all.
Correct Answer:
Verified
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