The Adjustment Process Back to the Steady State in the Short-Run

question 94

Multiple Choice

The adjustment process back to the steady state in the short-run model hinges on the:

• A) rate of unemployment.
• B) immediate reaction to a change in the inflation rate.
• C) consumers' response to inflation shocks.
• D) government's response to inflation shocks.
• E) slow adjustment of inflation reflected in the aggregate supply curve.

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