Question

If workers do not believe that policymakers are serious about fighting inflation, they are most likely to push for higher wages, which will ________ aggregate ________ and lead to unemployment or inflation or both, everything else held constant. increase; demand increase; supply decrease; supply decrease; demand

Answer 1

decrease ; supply.

Step-by-step explanation:

The decrease in supply creates an excess demand at the initial price.

Excess demand causes the price to rise and quantity demanded to decrease. Unemployment is also unavoidable.