In the Short Run, Higher Than Expected Inflation Puts _____

question 37

Multiple Choice

In the short run, higher than expected inflation puts _____ pressure on real wages and real rents, which leads businesses to _____ hiring.

• A) downward; increase
• B) upward; increase
• C) downward; reduce
• D) upward; reduce

---

Definitions:

Elasticity of Demand

An analysis of consumer demand's elasticity in relation to the pricing of a commodity.

Subsidy

Financial support extended by the government to an economic sector (or institution, business, or individual) with the aim of promoting economic and social policy.

Highly Elastic

Refers to a strong responsiveness of the quantity demanded or supplied of a good to a change in its price.

Statutorily Granted

Pertains to rights or powers given or enforced by a legislative body or statute.