In the new classical model, workers and firms try to keep their ...

[mspears3]

In the new classical model, workers and firms try to keep their real wages and relative prices from falling when ________.
 
  A) income falls
  B) they expect inflation to rise
  C) they expect inflation to fall
  D) they expect aggregate demand to fall

Question 2

If the interest rate increases, lifetime wealth (we)
 
  A) increases.
  B) stays constant.
  C) decreases.
  D) changes in an ambiguous way.

[underwood14]

Answer to Question 1

B

Answer to Question 2

C

[mspears3]

Gracias!

[dantucker]

Excellent