Other Things Constant, an Increase in the Expected Inflation Rate

question 107

Multiple Choice

Other things constant, an increase in the expected inflation rate will

• A) decrease the inflationary premium.
• B) increase money (nominal) interest rates.
• C) increase the supply of loanable funds.
• D) decrease the money interest rate.

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Definitions:

Sympathy Strikes

Labor strikes initiated by workers in one company or industry in support of workers in another organization or sector who are already on strike.

Collective Bargaining

The process by which workers, through their unions, negotiate contracts with their employers to determine terms of employment, including wages, hours, and working conditions.

Mass Migration

The movement of large numbers of people from one geographical area to another, often across international borders.

NAALC

The North American Agreement on Labor Cooperation, a supplementary agreement to NAFTA aimed at improving labor standards and working conditions in Canada, Mexico, and the United States.