Suppose that the natural rate of unemployment is 5% and the current inflation rate is 1% 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. 7%.
Answer:D
Suppose that the natural rate of unemployment is 5% and the current inflation rate is 1% 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. 7%.