The Reason Why Stagflation Can Occur When the Bank of Canada

question 80

Multiple Choice

The reason why stagflation can occur when the Bank of Canada attempts to remove a sustained inflation is that inflationary expectations cause the

• A)AD curve to shift too far to the right.
• B)AD curve to shift too far to the left.
• C)AS curve to continue shifting downward.
• D)AS curve to continue shifting upward.
• E)AD curve to continue shifting to the right.

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