If Actual Inflation Is Greater Than Expected Inflation

question 74

Multiple Choice

If actual inflation is greater than expected inflation,

• A)real wages rise.
• B)real wages fall.
• C)the Phillips curve is a vertical line.
• D)the unemployment rate rises.
• E)there is a transfer from borrowers to lenders.

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Definitions:

Annual Lease

A contract for the rental of property, typically real estate, that lasts for one year.

Payments to Workers

Payments to workers include salaries, wages, benefits, and other compensation provided to employees in exchange for their labor.

Entrepreneur's Forgone Interest

The potential interest income an entrepreneur sacrifices by investing their own money into their business instead of depositing it for interest.

Implicit Costs

Non-monetary opportunity costs that are not directly incurred as a result of performing business activities.