Question: Which statement below regarding monetary and fiscal policy is FALSE? If AD increases too much, prices will increase and AD will return to equilibrium. The

Which statement below regarding monetary and fiscal policy is FALSE?

  • If AD increases too much, prices will increase and AD will return to equilibrium.
  • The situation where unemployment is high and inflation is high is stagflation.
  • Expansionary policy causes AD to shift to the left.
  • The inverse relationship between inflation and unemploymentis known as the Phillips Curve.

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