When the Actual Rate of Inflation Is Less Than the Expected

question 57

Multiple Choice

When the actual rate of inflation is less than the expected rate,

• A)the unemployment rate will temporarily rise.
• B)firms will increase their output to recoup their falling profits.
• C)the unemployment rate will temporarily fall.
• D)firms will experience rising profits and thus increase their employment.

---

Definitions:

Popular Culture

Widely recognized and accepted cultural products, images, and practices, which permeate everyday life and are accessible to most people.

Psychodynamic Ideas

Concepts related to the psychological forces that underlie human behavior, feelings, and emotions, notably those that are unconscious.

Defensive Pessimism

A cognitive strategy where an individual sets low expectations for their performance, regardless of their actual ability, to prepare mentally for any possible outcome.

Conscious Mind

The aspect of mental processing that involves awareness of thoughts, feelings, and perceptions in the present moment.