During Inflationary Times,which of the Following Is Unlikely to Happen

question 109

Multiple Choice

During inflationary times,which of the following is unlikely to happen?

• A)People change their expectations about the inflation rate.
• B)Workers try to get increases in nominal wages.
• C)People are willing to lend money for longer periods.
• D)Relative price changes become harder to recognize.
• E)People buy physical assets as a hedge against rising prices.

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Definitions:

Perfect Competition

A market structure characterized by many buyers and sellers, homogenous products, and the free entry and exit of firms, leading to price takers.

Marginal Product

The additional output generated by employing one more unit of a certain input, such as labor or capital.

VMPL

The Value of Marginal Product of Labor, which is the additional value created by employing one more unit of labor.

Profit-maximizing

The process by which a firm determines the price and output level that generates the most profit.