If people believe that the central bank will achieve its target rate of inflation, then unemployment is likely to move to:

Question

Quizplus · Accepted Answer

When people believe the central bank will achieve its target rate of inflation, it stabilizes expectations and makes it easier for the economy to adjust to its natural rate of unemployment, which is the level of unemployment consistent with the economy's structure without accelerating inflation.

If People Believe That the Central Bank Will Achieve Its