Starting from a long-run equilibrium,immediate or eventual increases in the rate of inflation may be the result of any of the following EXCEPT
A) an upward inflation shock.
B) a monetary "easing."
C) an increase in government purchases.
D) a monetary "tightening."
E) a tax decreasE.

Question

Quizplus · Accepted Answer

Monetary "tightening" typically involves increasing interest rates or reducing the money supply, which would decrease inflation rather than increase it.

Starting from a Long-Run Equilibrium,immediate or Eventual Increases in the Rate