Attempts to force inflation below no-accelerating inflation rate of unemployment (NAIRU) will cause:
A)inflation accelerate without any change in employment or output
B)inflation to decelerate with rising employment and output
C)inflation to decelerate with employment and output remaining the same
D)inflation to remain unchanged with fall in employment and output

Question

Quizplus · Accepted Answer

Forcing inflation below the NAIRU typically results in accelerating inflation without impacting employment or output levels, as the economy tries to adjust back to its natural rate of unemployment.

Attempts to Force Inflation Below No-Accelerating Inflation Rate of Unemployment