The Expected Inflation Rate Is Equal to the Actual Inflation

question 110

Multiple Choice

The expected inflation rate is equal to the actual inflation rate.According to the (Friedman) natural rate theory,the economy is

• A) in a recessionary gap.
• B) in an inflationary gap.
• C) at a point on the short-run Phillips curve,but not on the long-run Phillips curve.
• D) biased toward producing a higher percentage of services than goods.
• E) producing Natural Real GDP.

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