Wednesday, October 28, 2009

Which of the following about the natural rate of unemployment is true?

a. it is the rate that prevails when actual inflation exceeds anticipated inflation.



b. if the actual rate of unemployment is above the natural rate, inflation rate will increase.



c. if the natural rate of unemployment is below the natural rate, the inflation rate will decrease.



d. the long run phillips curve analysis suggests that any attempts to reduce unemployment below the natural rate will only result in higher rates of inflation.



Which of the following about the natural rate of unemployment is true?

D

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