Suppose that the natural rate of unemployment is 4% and the current inflation rate is 2% per year. To bring the inflation rate down to zero, the actual unemployment rate in the economy would have to be:
A. 6%.
B. 4%.
C. 8%.
D. 2%.
Answer:C
Suppose that the natural rate of unemployment is 4% and the current inflation rate is 2% per year. To bring the inflation rate down to zero, the actual unemployment rate in the economy would have to be:
A. 6%. B. 4%. C. 8%. D. 2%.