Question 2

A law firm is meeting to set up prices it wants to charge for next year. They decide that, because inflation has increased by about 2.5% for the past three years, they will raise their prices by 2.5% for the coming year. If the actual inflation was 2% for the next year, we can say that _resulted in inflation because the law firm set its prices higher based on past experiences. O monetary policy; lower O inflation expectations; higher O inflation expectations; lower O monetary policy; higher