The reason why stagflation can occur when the Bank of Canada attempts to remove a sustained inflation is that inflationary expectations cause the

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When the Bank of Canada attempts to remove sustained inflation by tightening monetary policy and increasing interest rates, it causes a decrease in aggregate demand. However, if inflationary expectations are high, firms may expect higher prices for inputs and wages, causing the short-run aggregate supply (AS) curve to shift upward. This can lead to stagflation, where both inflation and unemployment are high.

The Reason Why Stagflation Can Occur When the Bank of Canada