Inflation positively correlated with which of the following?
A)nominal wage growth and nominal interest rates
B)neither nominal wage growth nor nominal interest rates
C)nominal wage growth, but not nominal interest rates
D)the nominal interest rate, but not nominal wage growth

Question

Quizplus · Accepted Answer

Inflation is positively correlated with nominal wage growth and nominal interest rates. When inflation increases, prices of goods and services increase, leading to an increase in wages and interest rates to keep up with the rising prices. Therefore, option A is the correct choice.

Inflation Positively Correlated with Which of the Following