The Key Feature Due to Which Unexpected Inflation Decreases the Unemployment

question 6

Multiple Choice

The key feature due to which unexpected inflation decreases the unemployment rate is that:

• A)expectations are formed irrationally.
• B)reservation wages of workers are fixed.
• C)workers behave irrationally.
• D)firms are greedy.
• E)government policy is time consistent.

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Definitions:

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A method or technique that has been generally accepted as superior to any alternatives because it produces results that are superior to those achieved by other means.

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The process of informing someone about a death, typically done by a professional or law enforcement officer.

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