When Inflation Rises Unexpectedly, It Is Generally the Case That

question 42

Multiple Choice

When inflation rises unexpectedly, it is generally the case that

• A)nominal interest rates and real interest rates will both rise at the same rate
• B)nominal interest rates will rise while real interest rates will decline
• C)real interest rates will rise while nominal interest rates will decline
• D)all nominal wages will immediately be adjusted upwards
• E)real wages will have to be adjusted upwards

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Definitions:

Stereotypes

Overgeneralized beliefs about a particular category of people.

Taboo

Behavior that brings the most serious sanctions.

Sanctions

Measures taken by a state or an agency to coerce another to conform to an international agreement or norms, often in the form of restrictions or penalties.

Element of Culture

An element of culture includes any constituent of culture, such as beliefs, values, norms, symbols, language, and rituals, that contributes to the identity and continuity of a particular society.