Suppose the AS Curve Is Continuously Shifting Upward Due to Expectations

question 16

Multiple Choice

Suppose the AS curve is continuously shifting upward due to expectations of future inflation.If there is repeated monetary validation of this supply shock,

• A)unemployment will continue to rise.
• B)the supply shocks will reverse themselves.
• C)workers will have higher real wages.
• D)there will be ongoing inflation.
• E)there will be a once-and-for-all rise in the price level.

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