In the basic model that includes the AD and LRAS curves only, a shock that reduces the velocity of money by 2 percentage points causes:
A) a decrease of the inflation rate by 2 percentage points.
B) a decrease of the inflation rate by less than 2 percentage points.
C) an increase of the inflation rate by 2 percentage points.
D) an increase of the inflation rate by less than 2 percentage points.
Correct Answer:
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