Which of the following is NOT likely to happen if the public expects an inflation rate of 8% when the actual rate is 4%?
A) Nominal interest rates will be higher than 8%.
B) Workers will want annual raises of at least 8%.
C) Firms will lay off workers.
D) Borrowers will gain from the difference in inflation rates.

Question

Quizplus · Accepted Answer

The Answer of Which of the following is NOT likely to happen if the public expects an inflation rate of 8% when the actual rate is 4%?
A) Nominal interest rates will be higher than 8%.
B) Workers will want annual raises of at least 8%.
C) Firms will lay off workers.
D) Borrowers will gain from the difference in inflation rates.

Which of the Following Is NOT Likely to Happen If