Expectations of steady inflation and staggered wage and price setting are two reasons why
A) the IA line is usually upward-sloping.
B) inflation is highly variable during the short run.
C) inflation does not change very much in the short run.
D) inflation changes immediately after a change in real GDP.
E) the IA line is usually downward-sloping.
Correct Answer:
Verified
Q151: Wage setting
A)is based only on wages expected
Q152: When real and potential GDP are equal,
A)prices
Q153: The inflation adjustment line is horizontal because
Q154: The inflation adjustment line IA will shift
Q155: Changes in aggregate demand can cause inflation
Q157: A firm expects inflation to remain at
Q158: The flat inflation adjustment line reflects the
Q159: A firm increases prices only if the
Q160: The inflation adjustment line is upward-sloping.
Q161: The intersection of the inflation adjustment line
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