Workers and Firms Both Expect That Prices Will Be 4

Workers and firms both expect that prices will be 4 per cent higher next year than they are this year.As a result

A) workers will be willing to take lower wages next year.
B) the purchasing power of wages will rise if wages increase by 4 per cent.
C) the short-run aggregate supply curve will shift to the left as wages increase.
D) aggregate demand will increase by 4 per cent.

Correct Answer:

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