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The statement is true. A cost-push shock implies a shift in the Phillips curve (defined in terms of a relationship between inflation and the output gap measured relative to efficient output). If monetary policy completely stabilized one of inflation or the output gap, the Phillips curve constraint would then imply that the other variable would fluctuate.
This document contains various important questions and their appropriate answers in the subject field of Economics.
Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
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