If Workers Expect Inflation, and Tend to Overestimate Actual Inflation

question 154

Multiple Choice

If workers expect inflation, and tend to overestimate actual inflation when they negotiate wage increases, the result will be a continuing

• A)shift of AD to the left.
• B)shift of AD to the right.
• C)recessionary gap.
• D)inflationary gap.

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Definitions:

Effective

Refers to something being successful in producing a desired or intended result.

Direct Competition

Occurs when businesses offer the same or similar products or services to the same customer base.

Unmet Customer Needs

Desires or requirements of consumers that are not being satisfied by current products or services on the market.

Differentiation

The process of distinguishing a product or service from others, to make it more attractive to a particular target market.