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If the Economy Is at Point a in the Phillips

Question 122

Multiple Choice

If the economy is at point A in the Phillips curve graph shown and the government runs expansionary monetary policy, what prediction would you make for inflation? If the economy is at point A in the Phillips curve graph shown and the government runs expansionary monetary policy, what prediction would you make for inflation? A) It will increase. B) It will decrease. C) It will remain constant. D) It will explode.


A) It will increase.
B) It will decrease.
C) It will remain constant.
D) It will explode.

Correct Answer:

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