27) Robert Shiller posed the following question to workers:ʺImagine that next year the inflation rateunexpectedly doubles. How long would it probably take, in these times, before your income isincreased enough so that you can afford the same things as you do today?ʺShiller found that________ percent of the workers he interviewed reported that it would take several years to restorethe purchasing power of their wages or that this power would never be restored.27) A) 25B) 42C) 64D) 81Answer: D Diff: 1 Page Ref: 956 - 957/582 - 583 Topic: Inflation Expectations and Wages Learning Outcome: Macro 13: Discuss the key measures, theories, and effects of inflation and deflation AACSB: TRUE/FALSE. Write ʹ T ʹ if the statement is true and ʹ F ʹ if the statement is false. 28) Ceteris paribus, in the short run following an increase in the rate of growth in Aggregate Demand,we would expect to see an increase in the rate of inflation and an increase in the rate ofunemployment. Diff: 2 Page Ref: 953/579 Topic: The Short - Run Trade - off between Unemployment and Inflation Learning Outcome: Macro 13: Discuss the key measures, theories, and effects of inflation and deflation AACSB: Reflective Thinking 29) If the actual rate of inflation exceeds the expected rate of inflation, the actual real wage is greaterthan the expected real wage and unemployment falls.29) Diff: 3 Page Ref: 955 - 956/581 - 582 Topic: The Short - Run Trade - off between Unemployment and Inflation Learning Outcome: Macro 13: Discuss the key measures, theories, and effects of inflation and deflation AACSB: Reflective Thinking