Low expected inflation leads to ________ increases in wages and costs and to ________ actual inflation.
A)large; high
B)large; low
C)small; low
D)small; high

Name: Low expected inflation leads to ________ increases in wages and costs and to ________ actual inflation. A)large; high B)large; low C)small; low D)small; high
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Question

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Inflation follows a "wage-price spiral." Small increases in prices are followed by small increases wages, which again only creates another round of minor price and wage increases.

Low Expected Inflation Leads to ________ Increases in Wages and Costs