If workers and firms have rational expectations, they understand that ________ monetary policy will raise the inflation rate, so actual inflation ________ expected inflation
A) contractionary; will be equal to
B) contractionary; will be less than
C) expansionary; will be greater than
D) expansionary; will be equal to
E) expansionary; will be less than
D
Economics
You might also like to view...
According to the Fisher effect, an increase in expected inflation results in:
A) lower nominal interest rates B) higher nominal interest rates C) lower real interest rates D) higher real interest rates
Economics
Explain the difference between Microeconomics and Macroeconomics
What will be an ideal response?
Economics