The persistence of inflation in times of output gaps is the result of the behaviour of ____ and the existence of ______.
A) the central bank; the Bank of Canada's reaction function
B) real and nominal interest rates; an output gap
C) autonomous aggregate demand; the Bank of Canada's policy reaction function
D) inflation expectations; long-term wage and price contracts
Correct Answer:
Verified
Q31: When aggregate demand falls and output falls:
A)
Q32: Recessionary gaps result in:
A) higher wage rate
Q33: Inflationary gaps result in:
A) higher wage rate
Q34: Differences in countries' adjustments to output gaps
Q35: A reduction in output and the demand
Q37: Firms are reluctant to make frequent changes
Q38: Real-world firms often meet workers' demands for
Q39: The Phillips curve shows that the rate
Q40: Suppose that businesses and labour anticipate the
Q41: The Phillips curve suggests that:
A) a trade-off
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