If the natural rate of unemployment _____, the nonaccelerating inflation rate of unemployment _____, and the long-run Phillips curve shifts to the left.

Question

Quizplus · Accepted Answer

According to the question, if the natural rate of unemployment falls, the nonaccelerating inflation rate of unemployment falls as well. This means that there is less unemployment in the economy and therefore less pressure on wages and prices to increase. As a result, the long-run Phillips curve shifts to the left, indicating that a lower level of unemployment can be achieved without triggering inflation.

If the Natural Rate of Unemployment _____, the Nonaccelerating Inflation