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-Refer to Figure 13

Question 59

Multiple Choice

-Refer to Figure 13.6. If a rise in the expected rate of inflation from 2% to 3% led to wage rates increasing at 3% a year: A) AS would shift down from AS<sub>0</sub> to AS<sub>1</sub>. B) real GDP would rise from Y<sub>0</sub> to Y<sub>P</sub>. C) AS would shift up from AS<sub>1</sub> to AS<sub>0</sub>. D) the change in wage rate increases would shift LAS from Y<sub>P</sub> to Y<sub>0</sub>.
-Refer to Figure 13.6. If a rise in the expected rate of inflation from 2% to 3% led to wage rates increasing at 3% a year:


A) AS would shift down from AS0 to AS1.
B) real GDP would rise from Y0 to YP.
C) AS would shift up from AS1 to AS0.
D) the change in wage rate increases would shift LAS from YP to Y0.

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