An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.

A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease


Answer: D

Economics

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A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease

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The relationship between real GDP and potential GDP is that

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