When a Central Bank Attempts to Stop a Sustained Inflation

question 53

Multiple Choice

When a central bank attempts to stop a sustained inflation, it tries to remove the inflationary gap by

• A)taking no action and allowing the market to correct itself.
• B)increasing the outward shift of the AD curve.
• C)shifting the AS curve upward.
• D)stopping the outward shift of the AD curve.
• E)shifting the AS curve downward.