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One Reason That Inflation Can Persist Even After Its Original

Question 21

Multiple Choice

One reason that inflation can persist even after its original causes have been removed is that


A) workers expect wage increases to match increases in labour productivity.
B) workers are willing to accept wage increases lower than the increase in productivity.
C) the Bank of Canada ensures that money-supply growth matches growth in real GDP.
D) inflationary expectations cause the AS curve to continue shifting upwards.
E) governments embark on a deficit-cutting program.

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