When faced with mild stagflation due to a leftward shift in the short-run AS curve, central bankers usually:   Select one:   a.   sell government bonds on the open market   b.   do nothing and wait for the economy to self-correct (unless inflation is high or accelerating)   c.   offset the inflationary effect by expansionary monetary policy shifting AD to the right   d.   raise the interest rate target to offset the economic contraction

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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When faced with mild stagflation due to a leftward shift in the short-run AS curve, central bankers usually:

 

Select one:

 

a.

 

sell government bonds on the open market

 

b.

 

do nothing and wait for the economy to self-correct (unless inflation is high or accelerating)

 

c.

 

offset the inflationary effect by expansionary monetary policy shifting AD to the right

 

d.

 

raise the interest rate target to offset the economic contraction

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