Suppose Self-Correction Works

question 80

Multiple Choice

Suppose self-correction works.Then, all things equal, a policy that continually increases aggregate demand is implemented.What kind of economic outcome will this policy lead to?  

• A) The policy will have a strong effect on GDP. 
• B) The policy will cause permanent inflation. 
• C) The policy will eventually cause the SRAS curve to shift to the right. 
• D) The policy will cause deflation.

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