In the AD/AS Model with a Sustained and Constant Inflation

question 21

Multiple Choice

In the AD/AS model with a sustained and constant inflation,

• A)there is no effective set of monetary policy tools to reduce inflation.
• B)expected inflation tends to be significantly less than actual inflation.
• C)there is a tendency for the price of bonds to be increasing rapidly.
• D)the AS curve is shifting upward because of inflation expectations.
• E)the AD curve is not shifting at all.

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