Multiple Choice
Which of the following is NOT likely to happen if the public expects an inflation rate of 8% when the actual rate is 4%?
A) Nominal interest rates will be higher than 8%.
B) Workers will want annual raises of at least 8%.
C) Firms will lay off workers.
D) Borrowers will gain from the difference in inflation rates.
Correct Answer:
Verified
Correct Answer:
Verified
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