What lowers unemployment?
A) inflation regardless of expectations
B) higher than expected inflation
C) lower than expected inflation
D) escalating inflation rates

Question

Quizplus · Accepted Answer

Higher than expected inflation can lower unemployment in the short term because it often leads to increased spending and hiring before wages and prices fully adjust to the inflationary environment. This is related to the short-term trade-off between inflation and unemployment described by the Phillips Curve.

What Lowers Unemployment