Use the figure below to answer the following question(s).
Figure 15-2
-According to the modern expectational Phillips curve illustrated in Figure 15-2, unemployment will equal the natural rate of unemployment when
A)inflation turns out to be lower than what people expected.
B)inflation turns out to be higher than what people expected.
C)inflation turns out to be equal to what people expected.
D)all of the above are true.

Question

Use the figure below to answer the following question(s).
Figure 15-2 
-According to the modern expectational Phillips curve illustrated in Figure 15-2, unemployment will equal the natural rate of unemployment when
A)inflation turns out to be lower than what people expected. 
B)inflation turns out to be higher than what people expected. 
C)inflation turns out to be equal to what people expected. 
D)all of the above are true.

Quizplus · Accepted Answer

Unemployment equals the natural rate when inflation is as expected, as there are no unexpected inflationary pressures to alter employment levels.

Use the Figure Below to Answer the Following Question(s)