When the Actual Rate of Inflation Exceeds the Expected Rate

question 130

Multiple Choice

When the actual rate of inflation exceeds the expected rate

• A) the unemployment rate will temporarily rise.
• B) firms will experience rising profits and thus increase their employment.
• C) the actual rate of inflation will fall.
• D) nominal wages will decline.

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Definitions:

Imports

Items or offerings that enter into a nation from abroad aimed at being sold or employed.

Domestic Supply and Demand

Refers to the quantity of a product or service available and the desire for it within a single country.

Tariff Revenue

Income that a government earns from the imposition of import and export duties.