Suppose That Households, Businesses and Organized Labour All Expect the Inflation

question 62

Multiple Choice

Suppose that households, businesses and organized labour all expect the inflation rate to increase and behave accordingly, this will cause:

• A) an acceleration of the inflation rate.
• B) a reduction in the inflation rate.
• C) the Phillips curve to shift away towards the origin.
• D) the level of unemployment to increase.

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