Consider the AD/AS Model Below with a Constant Rate of Inflation.No

Multiple Choice

Consider the AD/AS model below with a constant rate of inflation.No exogenous AD or AS shocks are occurring. FIGURE 29-1 Refer to Figure 29-1.Which of the following statements about this AD/AS diagram is true?

A) Expected inflation exceeds actual inflation.
B) Actual inflation exceeds expected inflation.
C) Actual inflation equals expected inflation.
D) Actual inflation equals output gap inflation.
E) Expected inflation equals output gap inflation.