During a Demand-Pull Inflation, If the Fed Tries to Maintain

question 135

Multiple Choice

During a demand-pull inflation, if the Fed tries to maintain a level of real GDP above potential GDP

• A) there will be a one-time shift in the AD and the SAS curves.
• B) the AD curve will shift rightward continuously and SAS curves will shift leftward continuously.
• C) the AD curve will shift rightward continuously and the SAS curve will not shift.
• D) the SAS curve will shift leftward continuously and the AD curve will not shift.

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