29.3 Reducing Inflation The Three Figures Below Show the Phases of a Disinflation.In

question 118

Multiple Choice

29.3 Reducing Inflation
The three figures below show the phases of a disinflation.In part (i) ,the economy is experiencing a sustained inflation at E₁. FIGURE 29-4
-Refer to Figure 29-4,part (i) .The elimination of the inflationary gap would normally be initiated by

• A)workers accepting a reduction in their wage growth.
• B)an increase in the productivity of workers.
• C)the Bank of Canada engaging in an expansionary monetary policy.
• D)the Bank of Canada stopping the ongoing monetary expansion.
• E)the government engaging in tax cuts and increasing transfer payments.

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