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QUESTION

If an increase in inflation is expected, which of the following events is the least likely to occur?

If an increase in inflation is expected, which of the following events is the least likely to occur?

  1. There will be an upward movement along the long-run Phillips curve.
  2. Nominal GDP will increase.
  3. A worker's reservation wage will rise at the same rate as expected inflation.
  4. Nominal wage rates will increase at the same rate as expected inflation.
  5. Unemployment rate will increase.
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