Unexpected inflation can affect the unemployment rate in all of the following ways except:
A) wage expectations.
B) inventory fluctuations.
C) wage contracts.
D) federal funds rate changes.
E) none - all of these affect the unemployment rate.

Question

Quizplus · Accepted Answer

Federal funds rate changes are not directly affected by unexpected inflation and therefore do not have a direct impact on the unemployment rate. Factors such as wage expectations, inventory fluctuations, and wage contracts can be influenced by unexpected inflation, leading to changes in the unemployment rate.

Unexpected Inflation Can Affect the Unemployment Rate in All of the Following