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In the First Half of 2008, Food and Energy Costs

Question 315

Multiple Choice

In the first half of 2008, food and energy costs in the United States increased. At the same time, the financial crisis slowed production. As a result, economists warned that the economy would


A) suffer an inflationary gap.
B) see a decrease in aggregate demand and an increase in long-run aggregate supply.
C) see an increase in potential GDP.
D) experience stagflation.

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