According to the classical theory of money, reducing inflation will not make workers richer because firms will increase product prices ______ each year and give workers ______ raises.
A) more; larger
B) more; smaller
C) less; larger
D) less; smaller

Question

Quizplus · Accepted Answer

According to the classical theory of money, reducing inflation means that firms will increase product prices less each year and give workers smaller raises, as both price levels and wage increases tend to mirror the rate of inflation.

According to the Classical Theory of Money, Reducing Inflation Will