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Workers and Firms Both Expect That Prices Will Be 3

Question 275

Multiple Choice

Workers and firms both expect that prices will be 3% higher next year than they are this year.As a result


A) workers will be willing to take lower wages next year.
B) the purchasing power of wages will rise if wages increase by 3%.
C) the short-run aggregate supply curve will shift to the left as wages increase.
D) aggregate demand will increase by 3%.

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