Consider the AD/AS Model Below with a Constant Rate of Inflation.No

question 64

Multiple Choice

Consider the AD/AS model below with a constant rate of inflation.No exogenous AD or AS shocks are occurring. FIGURE 29-1 Refer to Figure 29-1.Which of the following statements about this AD/AS diagram is true?

• A)Expected inflation exceeds actual inflation.
• B)Actual inflation exceeds expected inflation.
• C)Actual inflation equals expected inflation.
• D)Actual inflation equals output gap inflation.
• E)Expected inflation equals output gap inflation.

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