
According to the Central Bank Learning Story,if the central bank tries to permanently increase real output above its original trend it will
A) succeed in its real output goal, but at the cost of a constant, permanently higher rate of inflation.
B) succeed in its real output goal, but at the cost of a permanently accelerating rate of inflation.
C) fail in its real output goal, but will not increase the rate of inflation.
D) fail in its real output goal and increase the equilibrium rate of inflation.
E) fail in its real output goal and achieve permanently higher rates of inflation.
Correct Answer:
Verified
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