1. According to the wage-price spiral, if a company gives a worker a raise in pay, then they increase the price of their products. 2. When the actual inflation rate is lower than expected, lenders win and borrowers lose, because the real interest rate is greater than expected.

1. According to the wage-price spiral, if a company gives a worker a raise in pay, then they increase the price of their products. 2. When the actual inflation rate is lower than expected, lenders win and borrowers lose, because the real interest rate is greater than expected.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Money Growth And Inflation

Section: Chapter Questions

Problem 6PA

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Concept explainers

Unemployment and Cost of Unemployment

Unemployment is the state of being unemployed, even when an individual is actively seeking work opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed.

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True or False:
L. According to the wage-price spiral, if a company gives a worker a raise in pay, then they increase
the price of their products.
2.
When the actual inflation rate is lower than expected, lenders win and borrowers lose, because the
real interest rate is greater than expected.

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