Government can push the unemployment rate below the natural rate only by
A)instituting supply-side economic policies.
B)producing a higher rate of inflation than people expect.
C)balancing the federal budget.
D)achieving zero inflation.

Question

Quizplus · Accepted Answer

The correct answer is B because only by producing a higher rate of inflation than people expect can the government push the unemployment rate below the natural rate.

Government Can Push the Unemployment Rate Below the Natural Rate