Which of the Following Are Reasons Why Rational Workers and Firms

question 179

Multiple Choice

Which of the following are reasons why rational workers and firms may form their expectations by looking backward rather than forward?

• A)The existence of long-term wage and price agreements would prevent actual inflation from responding immediately to an acceleration in nominal GDP.
• B)If in the past acceleration in nominal GDP has caused inflation,then a current acceleration might be expected to increase inflation.
• C)People may have no reason to believe that the acceleration in GDP growth will be permanent.
• D)Both A and B.

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Definitions:

Complexity

The state or quality of being intricate or complicated, often requiring careful analysis or understanding.

Shared Leadership

A leadership approach emphasizing distributed responsibility among members of a team, allowing for collaborative decision-making and problem-solving.

Relationship-driven Structure

An organizational or group structure where decisions and processes are strongly influenced by interpersonal relationships and dynamics.

Unified Commitment

The collective agreement and determination of a group or organization to achieve common goals and objectives.