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The Natural Rate Hypothesis States That When the Inflation Rate

Question 61

Multiple Choice

The natural rate hypothesis states that when the inflation rate -------------------- , in the short run the unemployment rate-------------------- and in the long run the unemployment rate--------------------.


A) falls, decreases; returns to the natural unemployment rate
B) rises, decreases; returns to the natural unemployment rate
C) falls, decreases; decreases
D) rises, decreases; decreases
E) falls, increases; decreases

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