In the Short Run, an Unexpected Increase in the Inflation

question 74

Multiple Choice

In the short run, an unexpected increase in the inflation rate leads to

• A) a higher unemployment rate.
• B) a decrease in aggregate demand.
• C) a lower unemployment rate.
• D) workers thinking the money wage rate has fallen.

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Definitions:

Constitutional Convention

A historic assembly in 1787 where the Constitution of the United States was drafted, leading to the foundation of the nation's government.

Initiative Process

A procedure that allows citizens to propose and vote on legislation or constitutional amendments directly, bypassing the legislative body.

Supreme Court

The highest federal court in the United States, with ultimate appellate jurisdiction over all federal and state court cases that involve a point of constitutional or federal law.

Great Compromise

The agreement that large and small states reached during the Constitutional Convention of 1787 that in part defined the legislative structure and representation each state would have under the United States.