Author Question: From the new classical perspective, the disinflation in the early 1980s resulted in a significant ... (Read 75 times)

mckennatimberlake · **on:** Jun 30, 2018

From the new classical perspective, the disinflation in the early 1980s resulted in a significant recession because

a. the policy change to disinflation was unanticipated.
b. the policy was not credible.
c. inflationary expectations were backward looking.
d. None of the above
e. both a and b.

Question 2

If the output gap is constant at minus 2 and the inflation rate has fallen from 6 percent to 5 percent, then next period's short-run aggregate supply curve might be ________.

A) = 5 - 0.5 (13 - 15)
B) = 5 + 0.5 (13 - 15)
C) = 4 + 0.5 (13 - 15)
D) = 5 + 2 (11 - 15)
E) none of the above