When Businesses and Workers Start to Expect Higher Inflation

question 84

Multiple Choice

When businesses and workers start to expect higher inflation:

• A) prices and wages tend to fall.
• B) output tends to rise.
• C) the economy moves into recession.
• D) prices and wages tend to rise.

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Definitions:

Capital

In economics, capital refers to financial assets or the financial value of assets, such as funds held in deposit accounts, as well as the physical factors of production and facilities.

Risk-Averse

The preference to avoid taking risks, favoring safer or more predictable outcomes over potentially higher but riskier rewards.

Exporting

Exporting is the process of selling goods or services produced in one country to buyers in other countries.

Global Segmentation

Global segmentation involves dividing a market into distinct groups of consumers with shared characteristics across international borders to tailor marketing efforts.