The main argument in favor of the existence of a natural rate of unemployment in the long run focuses on what argument?
A) Workers will adjust their inflationary expectations in the long run so that unemployment is unrelated to inflation.
B) Workers refuse to be unemployed in the long run.
C) Firms need to be at full employment in the long run.
D) Wages will always adjust to make the long-run unemployment rate zero percent.
E) The government cannot affect inflation in the long run.

Question

Quizplus · Accepted Answer

The main argument for the existence of a natural rate of unemployment in the long run is that workers adjust their inflationary expectations over time, making unemployment unrelated to inflation in the long run. This concept is central to the natural rate hypothesis, which suggests that there is a level of unemployment that the economy tends to return to in the long run, regardless of the rate of inflation.

The Main Argument in Favor of the Existence of a Natural