Inflation expectations are like a self-fulfilling prophecy because inflation managers will raise their prices by whatever rate they expect and create that level of inflation.
Inflation is a persistent rise in the general price levels. When inflation managers expect the inflation rate to be a certain percentage, the increase prices by that percentage in anticipation of the inflation. Thus, as a result, inflation would increase by the amount expcected by the inflation managers.
Here are the options of this question:
they end up breaking the vicious cycle of demand-pull inflation.
whatever rate of inflation managers expect, they will end up creating that amount of unexpected inflation.
inflation managers will raise their prices by whatever rate they expect and create that level of inflation.
inflation actually changes by the amount of unexpected inflation.
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