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-Refer to the Above Diagram and Assume That Prices and Wages

Question 15

Multiple Choice

-Refer to the above diagram and assume that prices and wages are flexible both upward and downward in the economy. In the long run AD-AS model: A) demand-pull inflation would involve a shift of curve D to the right. B) cost-push inflation would involve a shift of curve B downward. C) recession would involve a leftward shift of curve A. D) frictional unemployment would be zero in the long run.
-Refer to the above diagram and assume that prices and wages are flexible both upward and downward in the economy. In the long run AD-AS model:


A) demand-pull inflation would involve a shift of curve D to the right.
B) cost-push inflation would involve a shift of curve B downward.
C) recession would involve a leftward shift of curve A.
D) frictional unemployment would be zero in the long run.

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