If Workers and Firms Forecast Inflation Accurately

question 171

Multiple Choice

If workers and firms forecast inflation accurately,

• A)the aggregate supply curve will be vertical.
• B)the real wage will not decline as the price level rises.
• C)workers will not lose from inflation, and firms will not gain.
• D)All of the above are correct.

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Definitions:

Specific Goals

Clearly defined, measurable, and time-bound objectives that are designed to guide actions and measure progress.

Feedback

Information given to an individual or system about its performance, intended to guide future improvements or adjustments.

Universality

The quality of being true or applicable in all situations, cultures, or times.

Facial Expressions

Nonverbal cues conveyed by movements of the facial muscles, often reflecting emotions.