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Imagine an economy with an E( ) of 4% (Expected inflation). Imagine that the economy is operating in the short-run. Based on the scenario presented
Imagine an economy with an E() of 4% (Expected inflation). Imagine that the economy is operating in the short-run.
Based on the scenario presented above, when the economy is above the full-employment real GDP?
rises above 4%
E() rises above 4%
falls below 4%
E() falls below 4%
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