Suppose that expected inflation is 5 % and thus , nominal wages rise , along with all other input prices by 5 % . Suppose also , that actual...
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50.

Suppose that expected inflation is 5% and thus, nominal wages rise, along with all other input prices by 5%. Suppose also, that actual inflation over this period was only 2%. In terms of the behavior of the short-

run aggregate supply curve, it would shift up given the expectations of higher inflation and then shift downward to adjust for the actual rate of inflation.A) TrueB) False
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