Ask Question
BusinessBusiness
20 August, 01:55

Firms and workers expect inflation to rise from 3% to 5% next year. As a result, this should

A. move the economy down along a stationary short-run aggregate supply curve.

B. shift the short-run aggregate supply curve down.

C. move the economy up along a stationary short-run aggregate supply curve.

D. shift the short-run aggregate supply curve up.

+4
Answers (1)
  1. 20 August, 02:09
    0
    Option B. Shift the short-run aggregate supply curve down.

    Explanation:

    The reason is that the inflation increases the price of the product which results in decrease in the demand of the product and this decrease in the demand of the product due to increasing inflation results in decrease in the supply of the product because the firms have to control the marginal cost of the product to lower the prices and stay in demand. Hence option B is the correct option.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Firms and workers expect inflation to rise from 3% to 5% next year. As a result, this should A. move the economy down along a stationary ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
There are two goods, apples and oranges, in a country. If the relative price of apples (in terms of oranges) is 4 and the opportunity cost of an apple is 3 oranges, what will workers produce?
Answers (1)
An informal organizational network through which unofficial information flows
Answers (1)
Polly tried for a half an hour to get online. Her tablet could detect a signal, which means that her wireless card was turned on. Her tablet also showed that the signal strength was strong. What should she try next to connect to the Internet? A.
Answers (1)
Which is an example of a literary question
Answers (1)
A period of very low inflation would most likely lead to
Answers (1)
New Questions in Business
Which education level has the highest return on investment (ROI)
Answers (1)
Assume that the money demand function is (M / P) d = 2,200 - 200r, where r is the interest rate in percent. If the price level is fixed at P=2, and the Fed wants to fix the interest rate at 7 percent, it should set the money supply at:
Answers (1)
On August 2, 2013, Jun Co. receives a $6,000, 90-day, 12% note from customer Ryan Albany as payment on his $6,000 account. 1. Prepare the journal entry assuming the note is honored by the customer on October 31, 2013.
Answers (1)
Are schools officials immune from being sued?
Answers (1)
Assume an asset cost $72,800 and has a current book value of $42,760. The asset is sold today for $32,900 cash. The firm's tax rate is 21 percent. As a result of this sale, the firm's net cash flow: 1. will increase by more than $32,900. 2.
Answers (1)
Home » Business » Firms and workers expect inflation to rise from 3% to 5% next year. As a result, this should A. move the economy down along a stationary short-run aggregate supply curve. B. shift the short-run aggregate supply curve down. C.
Sign Up Forgot Password?