Anticipated inflation
A)allows us to eliminate the problems associated with unemployment
B)causes more problems than unanticipated inflation
C)causes fewer problems than unanticipated inflation
D)is easy to predict for economists
E)prevents workers from increasing their purchasing power

Question

Quizplus · Accepted Answer

Anticipated inflation is when people expect the inflation rate to increase or stay the same. In this case, people can adjust their behavior accordingly, such as negotiating higher wages or increasing prices. Anticipated inflation causes fewer problems than unanticipated inflation because people can plan and adjust their behavior, and the uncertainty surrounding unanticipated inflation can cause economic instability.

Anticipated Inflation