If Workers and Firms Expect That Inflation Will Be 3

question 80

Multiple Choice

If workers and firms expect that inflation will be 3 percent next year, and real wages are not changing over time, by how much will nominal wages increase?

• A)3 percent
• B)more than 3 percent
• C)less than 3 percent
• D)the real wage rate divided by the expected inflation rate
• E)depends on actual inflation for next year

---

Definitions:

Ownership Transfer

The legal process of transferring the title of property, assets, or business from one entity or individual to another.

Firm's Leadership

The individuals at the top of an organization who are responsible for setting strategic directions, making major decisions, and inspiring employees towards achieving corporate goals.

Family Businesses

Enterprises owned and often operated by members of the same family, typically passing leadership from one generation to the next.

Unique Problems

Issues or challenges that are distinct and not previously encountered, requiring bespoke solutions.