Suppose the Actual Rate of Inflation in the Economy Is

Multiple Choice

Suppose the actual rate of inflation in the economy is 5%.If we know that expected inflation is 2%,and that output-gap inflation is 1%,then we also know that

A) the NAIRU is 5%.
B) money wages must be rising by 5%.
C) non-wage supply-shock inflation must equal 2%.
D) expected inflation is rising by 2%.
E) the actual rate of inflation is falling.