When Workers and Employers Correctly Anticipate an Increase in Inflation

question 34

Multiple Choice

When workers and employers correctly anticipate an increase in inflation caused by an increase in aggregate demand,

• A)workers will overestimate the real wage rate.
• B)unemployment will be at the natural rate.
• C)workers will underestimate the real wage rate.
• D)there will be no unemployment.

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Definitions:

Scale Development

The process of designing, testing, and validating a scale or instrument for measurement, typically of attitudes, attributes, or behaviors.

Thurstone Scales

A psychometric scale developed by L. L. Thurstone, used to measure attitudes by asking respondents to agree or disagree with a series of statements, each weighted according to their position on an agree-disagree continuum.

Likert Scale

A Likert scale is a psychometric scale commonly involved in research that employs questionnaires. It is the most widely used approach for scaling responses in survey research, such that the term is often used interchangeably with rating scale, even though the two are not synonymous.

Aptitude

A natural ability to do something or to learn something.