(Consider This) Some economists believe that modest inflation,say 2-3 percent,might help reduce unemployment during recessions.Which of the following best explains their argument?
A) Inflation will cause workers' real income to decline,encouraging them to work harder to find more and better employment.
B) Higher prices will increase firm profitability,making them want to hire more workers.
C) Higher prices will correspond with higher wages,which will stimulate demand and employment.
D) Anticipating this inflation,consumers will increase spending to beat the price increases,increasing demand,output,and employment.
Correct Answer:
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