The Reason Why Inflation Can Persist Even After Its Original

question 41

Multiple Choice

The reason why inflation can persist even after its original causes have been removed is that

• A)governments embark on a deficit- cutting program.
• B)the Bank of Canada ensures that money- supply growth matches growth in real GDP.
• C)workers expect wage increases to match increases in labour productivity.
• D)inflationary expectations cause AS to continue shifting upwards.
• E)workers are willing to accept wage increases lower than the increase in productivity.

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Definitions:

Willing

Reflects an individual's readiness or inclination to perform a certain action or make a choice under given conditions.

Comparative Advantage

The ability of an entity to produce a particular good or service at a lower opportunity cost than another, leading to more efficient international trade and resource allocation.

Basketballs

Spherical balls used in the sport of basketball, designed for bouncing on hard surfaces and shooting into hoops.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision or choosing among options.