In the Short Run, If the Actual Rate of Inflation

question 105

Multiple Choice

In the short run, if the actual rate of inflation is lower than the expected rate, then:

• A) Nominal wages will rise, profits will fall, and unemployment will rise
• B) Nominal wages will fall, profits will rise, and unemployment will fall
• C) Nominal wages will rise, profits will rise, and unemployment will fall
• D) Nominal wages will fall, profits will fall, and unemployment will rise

---

Definitions:

Regression Model

A mathematical representation of the relationship between a dependent variable and one or more independent variables.

Independent Variable

A variable that is manipulated or categorized to observe its effect on a dependent variable, without being affected by other variables in the experiment.

Error Variable

It represents the difference between observed and theoretical values in statistical models, attributable to randomness or unforeseen factors.

Standard Deviation

A calculation that determines the spread or inconsistency among values in a series, illustrating how far these values stray from their central value.