If Workers Expect the Rate of Inflation to Rise from 3

question 26

Multiple Choice

If workers expect the rate of inflation to rise from 3 per cent to 5 per cent next year,this should

• A) shift the short-run aggregate supply curve to the left.
• B) shift the short-run aggregate supply curve to the right.
• C) move the economy up along a stationary short-run aggregate supply curve.
• D) move the economy down along a stationary short-run aggregate supply curve.