If policy makers do nothing in response to an inflationary gap, what will happen?
A) a rapid movement toward lower unemployment and higher inflation
B) a rapid movement toward lower unemployment and lower inflation
C) a slow movement toward higher unemployment and higher inflation
D) a slow movement toward lower unemployment and lower inflation
Correct Answer:
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Q154: If strong fiscal policy stimulus is used
Q155: Figure 17-8 Q156: If strong monetary policy stimulus is used Q157: Figure 17-8 Q158: Figure 17-8 Q160: Policy makers who believe that the costs Q161: If actual inflation differs from expected inflation, Q162: Based on the evidence, most economists believe Q163: If actual inflation differs from expected inflation, Q163: If the self-correcting mechanism operates quickly, Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
A)direct intervention
