Some critics of the ADI-IA model have noted that the economy's potential output could occur at any point over a range of possible outputs,rather than at a single level of output.If the critics are right,then
A) accelerating inflation would be compatible with many output levels.
B) decelerating inflation would be compatible with many output levels.
C) inflation stability would be compatible with many output levels.
D) inflation stability would be compatible with only a single output level.
E) inflation stability would be compatible with two separate output levels.

Question

Quizplus · Accepted Answer

If the critics are right and potential output can occur at any point over a range of possible outputs, then there is no reason to believe that inflation stability would only be compatible with a single output level. In fact, it would be compatible with many output levels, as the economy could operate at different levels without significantly affecting inflation as long as it remained within a stable range.

Some Critics of the ADI-IA Model Have Noted That the Economy's