Suppose that currently the average inflation rate is 5% per year; however, business firms and labour anticipate that the general price level will increase by substantially more than the 5% over the next two years. Other things constant, these expectations can cause______.
A.
an acceleration of the rate of increase in the price level
B.
an increase in the productivity of business firms and labour
C.
a decrease in the rate of inflation
D.
no actual change in the price level but an increase in the level of unemployment