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If Workers Believe That Government Policymakers Will Increase Aggregate Demand

Question 54

Multiple Choice

If workers believe that government policymakers will increase aggregate demand to avoid a politically unpopular increase in unemployment when workers demand higher wages,then workers will not fear higher unemployment and their wage demands will result in


A) demand-pull inflation.
B) hyperinflation.
C) deflation.
D) cost-push inflation.

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