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Refer to the Following Figure When Answering

Question 58

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Refer to the following figure when answering
Figure 13.4: AS/AD Model Refer to the following figure when answering   Figure 13.4: AS/AD Model   -Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario. In the 1990s, Japan experienced a prolonged sluggish economy. If the Bank of Japan targeted inflation, it would have responded to this situation by ________, pushing the economy from point ________ to point ________; eventually the economy would have returned to the steady state at point ________. A)  raising the inflation target rate; a; b; c B)  lowering the inflation target rate; a; b; c C)  raising the inflation target rate; a; d; c D)  lowering the inflation target rate; c; d; a E)  Not enough information is given.
-Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario. In the 1990s, Japan experienced a prolonged sluggish economy. If the Bank of Japan targeted inflation, it would have responded to this situation by ________, pushing the economy from point ________ to point ________; eventually the economy would have returned to the steady state at point ________.


A) raising the inflation target rate; a; b; c
B) lowering the inflation target rate; a; b; c
C) raising the inflation target rate; a; d; c
D) lowering the inflation target rate; c; d; a
E) Not enough information is given.

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