CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

Inflationary expectations are important because widespread changes in inflationary expectations affect ______.

A. relative prices
B. actual inflation
C. unexpected inflation
Correct Answer: B

If people expect more inflation, they will bargain for higher wages and prices, which will in turn generate more inflation.

User Contributed Comments 4

User Comment
danlan This is an interest point.
todolist smart pointers!
wundac inflationary expectations affect actual inflation? I never thought of it that way
Beret A self fullfilling prophesy ...
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