Author Question: If actual inflation is greater than expected inflation A) the Phillips curve is a vertical line. ... (Read 146 times)

KimWrice · **on:** Jun 29, 2018

If actual inflation is greater than expected inflation

A) the Phillips curve is a vertical line. B) real wages fall.
C) real wages rise. D) the unemployment rate rises.

Question 2

Employees at the hospital have negotiated a 3 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 5 percent over the next year, which of the following will occur?

A) Real wages for hospital employees will fall. B) The increase in inflation is expected.
C) Inflation will be 3 percent the following year. D) Unemployment of hospital employees will rise.