A low,positive rate of price inflation
A) allows real wages to rise when nominal wages are sticky
B) allows real interest rates to become negative when nominal interest rates fall to zero
C) allows unemployment to remain below the natural rate indefinitely
D) allows firms to make economic profits even in perfectly competitive markets
E) prevents the public from forming expectations regarding the price level

Question

Quizplus · Accepted Answer

The Answer of A low,positive rate of price inflation
A) allows real wages to rise when nominal wages are sticky
B) allows real interest rates to become negative when nominal interest rates fall to zero
C) allows unemployment to remain below the natural rate indefinitely
D) allows firms to make economic profits even in perfectly competitive markets
E) prevents the public from forming expectations regarding the price level

A Low,positive Rate of Price Inflation