When Inflation Is Very Low,how Do Workers and Firms Adjust

question 66

Multiple Choice

When inflation is very low,how do workers and firms adjust their expectations of inflation?

• A)They rapidly adjust their expectations of inflation upward.
• B)They rapidly adjust their expectations of inflation downward.
• C)They tend to ignore inflation.
• D)They are more aggressive in asking for wage and price increases.

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Definitions:

AB Design

A basic experimental design involving a baseline (A) followed by a treatment or intervention phase (B) to measure change.

Time-Series Format

A sequence of data points collected or recorded at successive points in time, often used to analyze trends over time.

Reversal Design

A behavioral research methodology where an initial baseline condition is observed, an intervention implemented, and then withdrawn to observe changes in behavior or conditions, often followed by the reintroduction of the intervention.

Mechanisms of Change

Refers to the processes or pathways through which an intervention or action produces its effects.