A Reduction in Actual GDP Down Toward Its Potential from a Demand-

Multiple Choice

A reduction in actual GDP down toward its potential from a demand- induced boom can be expected to be quicker

A) the more sensitive inflation is to economic conditions.
B) the more heavily recent inflationary experience is weighted in the computation of inflationary expectations.
C) the more responsive interest rates are to changes in inflation.
D) all of the above.
E) none of the above.