When inflation is very low, how do workers and firms adjust their expectations of inflation?
A) They rapidly adjust their expectations of inflation upward.
B) They rapidly adjust their expectations of inflation downward.
C) They tend to ignore inflation.
D) They are more aggressive in asking for wage and price increases.
E) They only slowly adjust their expectations in response to errors.
Correct Answer:
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Q64: If workers accurately predict the rate of
Q136: Figure 13.5 Q137: The _ curves are both vertical. Q138: An increase in expected inflation will Q139: Figure 13.3 Q140: Where does the short-run Phillips curve intersect Q142: During which of the following time periods Q143: In which of the following situations might Q145: If wages and prices adjust slowly, we Q146: Figure 13.6 Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
A)aggregate demand
A)increase real
