Which of the following would be expected to cause an increase in the inflation rate rather than a once-and-for-all increase in the price level?

Question

Quizplus · Accepted Answer

The expectations of higher future inflation can lead to an increase in inflation as people start to adjust their behavior and decisions based on those expectations. This can lead to higher prices and wages, which in turn can cause further inflationary pressures. The other options are all more likely to cause a one-time increase in the price level rather than sustained inflation.

Which of the Following Would Be Expected to Cause an Increase