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The Sequence That Brings an Economy Back Toward Equilibrium from a Boom

Question 2

Multiple Choice

The sequence that brings an economy back toward equilibrium from a boom includes


A) an increase in inflation that works its way into expectations.
B) higher inflationary expectations that reduce aggregate demand.
C) actual GDP converging to its potential even before inflation subsides completely.
D) all of the above.
E) none of the above.

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