If a Firm Expects the Rate of Inflation to Be

question 142

Multiple Choice

If a firm expects the rate of inflation to be 2 percent, it will expect its competitors to

• A)do anything, since firms operate under limited information.
• B)increase prices by 2 percent unless circumstances change.
• C)not raise prices unless there is a change in circumstances.
• D)increase prices by more than 2 percent unless circumstances change.
• E)increase prices by less than 2 percent unless circumstances change.

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Definitions:

Interventions

Actions taken to improve a situation, especially in the context of problematic behaviors or health concerns, through various forms of treatment or programs.

Techniques

Methods or ways of carrying out a particular task, especially in a skilled or proficient manner.

Reactive

Refers to responding to stimuli after they have occurred, rather than anticipating or initiating action.

Evocative

Having the ability to elicit a strong mental, emotional, or physical response.