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If Expectations Are Adaptive,then What Is the Long-Run Danger of an Activist

Question 20

Multiple Choice

If expectations are adaptive,then what is the long-run danger of an activist monetary policy?


A) high inflation and high unemployment
B) stagnant real gross domestic product (GDP) and high inflation
C) underestimated inflation and high unemployment
D) low real gross domestic product (GDP) growth and low unemployment
E) sticky prices and high unemployment

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