The expected inflation rate is the inflation rate that people forecast and use to help set
A) the money wage rate.
B) the real wage rate.
C) the natural rate of unemployment.
D) real GDP.
E) the price level.

Question

Quizplus · Accepted Answer

The expected inflation rate is a key determinant of the money wage rate, as workers will demand higher wages in anticipation of higher prices. As a result, employers may adjust wages to reflect these expectations, leading to changes in the overall price level.

The Expected Inflation Rate Is the Inflation Rate That People