Which of the following is a characteristic of a sunk cost?
a. It cannot be recovered

Change in U.S. policy can lead to changes in inflationary expectations, interest rates, and exchange rates simultaneously as they all adjust to new equilibrium levels

Indicate whether the statement is true or false

To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:

A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.