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Suppose Self-Correction Works

Question 80

Multiple Choice

Suppose self-correction works.Then, all things equal, a policy that continually increases aggregate demand is implemented.What kind of economic outcome will this policy lead to?  


A)  The policy will have a strong effect on GDP. 
B)  The policy will cause permanent inflation. 
C)  The policy will eventually cause the SRAS curve to shift to the right. 
D)  The policy will cause deflation.

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