Explain what happens to the inflation adjustment line in the long run in each of the following cases.
(A)The economy sinks into a recession.
(B)Firms expect the Fed will adjust monetary policy and allow inflation to rise from 2 percent to 4 percent.
(C)OPEC successfully doubles the price of oil on the market.
(D)Congress cuts taxes.
(E)Potential GDP increases.

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The Answer of Explain what happens to the inflation adjustment line in the long run in each of the following cases.
(A)The economy sinks into a recession.
(B)Firms expect the Fed will adjust monetary policy and allow inflation to rise from 2 percent to 4 percent.
(C)OPEC successfully doubles the price of oil on the market.
(D)Congress cuts taxes.
(E)Potential GDP increases.

Explain What Happens to the Inflation Adjustment Line in the Long