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

question 69

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 (ii) or (iii) .A movement of the economy from E₃ to E₂ could be due to

• A)a slow fall in wages due to the recessionary gap.
• B)an expansionary monetary policy.
• C)a contractionary monetary policy.
• D)a rise in unit costs caused by falling wages.
• E)a positive aggregate demand shock.

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