If households anticipate that government intervention to stimulate demand will create inflation they will likely attempt to:
A) negotiate higher incomes.
B) accelerate purchases before prices rise.
C) negotiate loans before interest rates go up.
D) all of the above.

Question

Quizplus · Accepted Answer

When households anticipate inflation due to government intervention to stimulate demand, they are likely to take actions to protect their purchasing power and financial well-being. This includes negotiating higher incomes to keep up with expected price increases, accelerating purchases to avoid higher future prices, and securing loans before interest rates rise, which is common during inflationary periods. Therefore, all of the given options are correct responses to the anticipation of inflation.

If Households Anticipate That Government Intervention to Stimulate Demand Will