Which of the following does not explain the relatively low price inflation compared to the higher wage inflation in the U.S.during the 1990s?

Question

Quizplus · Accepted Answer

A higher natural rate of unemployment, also known as the NAIRU (non-accelerating inflation rate of unemployment), would result in higher wage inflation as employers would have to pay more to attract and retain employees. However, it would also put downward pressure on price inflation as there would be less pressure on supply chains to increase prices due to a smaller labor pool. The other options (A, B, and D) could all contribute to lower price inflation, but they would not necessarily explain the difference between price and wage inflation during the 1990s.

Which of the Following Does Not Explain the Relatively Low