If a Firm Expects the Rate of Inflation to Be

question 142

Multiple Choice

If a firm expects the rate of inflation to be 2 percent, it will expect its competitors to

• A)do anything, since firms operate under limited information.
• B)increase prices by 2 percent unless circumstances change.
• C)not raise prices unless there is a change in circumstances.
• D)increase prices by more than 2 percent unless circumstances change.
• E)increase prices by less than 2 percent unless circumstances change.

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Definitions:

Development

The process of growth, progress, or positive change within an individual, organization, or society.

Performance Potential

The capacity or ability of an individual or organization to achieve and exceed established goals or targets in a given period.

Qualified Workforce

A body of employees or workers who possess the necessary skills, qualifications, and experience to effectively perform their job roles.

Manager

An individual responsible for controlling or administering all or part of a company or similar organization, directing operations, and making key decisions.