The higher the anticipated inflation rate,_____.
A)the more workers will ask for in wages and the more firms will agree to pay
B)the more workers will ask for in wages and the less firms will agree to pay
C)the less workers will ask for in wages and the less firms will agree to pay
D)the higher the real wage increases offered by firms
E)the higher the real wage increases asked for by workers

Question

Quizplus · Accepted Answer

When inflation is anticipated to be high, workers tend to ask for higher wages to maintain their purchasing power, and firms, understanding the inflationary context, are more likely to agree to these increases to retain their workforce and maintain productivity.

The Higher the Anticipated Inflation Rate,_____