Suppose there is a positive AD shock,and it is validated by the Bank of Canada.In this case,
A) the shock will have eliminated the possibility of a continued inflation.
B) there is the risk of continued inflation.
C) wages will fall to reduce the resulting unemployment.
D) output will fall more rapidly than if the shock had not been validated.
E) the AD curve will shift to the left and inflation will stop.
Correct Answer:
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A)the inflation that results
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