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Which of the Following Statements Are Correct? the Expectational Effect

Question 2

Multiple Choice

Which of the following statements are correct? The expectational effect of inflation
1) is nullified as soon as the government promises zero inflation;
2) often plays a role in accelerating inflation;
3) is not directly a monetary cause of inflation.


A) 1 only
B) 2 only
C) 3 only
D) 1 and 2
E) 2 and 3

Correct Answer:

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