(Figure: Demand Shock I) The movement shown in the figure will only reduce the unemployment rate if:

A) actual inflation is equal to expected inflation.
B) actual inflation is lower than expected inflation.
C) actual inflation is higher than expected inflation.
D) there are no expectations concerning inflation.

Question

(Figure: Demand Shock I) The movement shown in the figure will only reduce the unemployment rate if:
 
A) actual inflation is equal to expected inflation. 
B) actual inflation is lower than expected inflation. 
C) actual inflation is higher than expected inflation. 
D) there are no expectations concerning inflation.

Quizplus · Accepted Answer

The Answer of (Figure: Demand Shock I) The movement shown in the figure will only reduce the unemployment rate if:
 
A) actual inflation is equal to expected inflation. 
B) actual inflation is lower than expected inflation. 
C) actual inflation is higher than expected inflation. 
D) there are no expectations concerning inflation.

(Figure: Demand Shock I) the Movement Shown in the Figure