Inflation Can Occur Under Conditions of Full Employment

question 25

Multiple Choice

Inflation can occur under conditions of full employment

• A) only if the central bank continues to inject money into the economy and the agents' expectations of inflation are supported by the bank's activities.
• B) only if the central bank continues to inject money into the economy.
• C) only if the central bank continues to withdraw money from the economy.
• D) only if the central bank continues to inject money into the economy and all agents expect that inflation will not occur.
• E) only if the central bank fails to inject money into the economy.

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