When the Actual Rate of Inflation Is Less Than the Expected

question 12

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:

Future Value

Future value is the value of a current asset at a specified date in the future based on an assumed rate of growth over time.

Single Amount

A lump-sum value; referring to a financial transaction or an accounting entry that involves only one amount rather than multiple payments or amounts.

Concept

An abstract idea or a general notion representing something, often used as a foundational principle or theory.

Semiannual Deposits

Payments or savings contributions made twice a year into a particular account or investment.