Inflation Inertia Is the Result of the Behaviour of ________

Multiple Choice

Inflation inertia is the result of the behaviour of ________ and the existence of __________.

A) the central bank;the Bank of Canada's reaction function
B) real and nominal interest rates;an output gap
C) autonomous aggregate demand;the Bank of Canada's policy reaction function
D) inflation expectations;long-term wage and price contracts
E) potential output;automatic stabilizers