If a Country Experiences Persistently Low Inflation, Which of the Following

question 2

Multiple Choice

If a country experiences persistently low inflation, which of the following tends not to occur?

• A) Nominal wages will be set for shorter periods of time.
• B) Workers are resistant to decreases in the nominal wage.
• C) Wage indexation will become less important.
• D) The Phillips curve relation becomes weaker.
• E) The markup over labour costs will decrease.

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