Unanticipated inflation is the difference between:
A) the inflation rate this year and the inflation rate that we want the economy to have this year.
B) the actual observed inflation rate this year and the inflation rate last year.
C) the inflation rate last year and the inflation rate that we want the economy to have last year.
D) the expected inflation rate and the actual observed inflation rate.

Question

Quizplus · Accepted Answer

Unanticipated inflation is the difference between the expected inflation rate and the actual observed inflation rate. It occurs when actual inflation rate differs from the expected rate, leading to unexpected economic consequences such as redistribution of wealth from lenders to borrowers or vice versa, reduction in purchasing power of people, and uncertain economic outlook.

Unanticipated Inflation Is the Difference Between