Suppose that the natural rate of unemployment is 5.7 percent.If unemployment has for some time been varying between 5.1 and 5.3 percent,we should be at an actual real GDP ________ the natural real GDP,and should expect inflation to be ________.
A)below,slowing down
B)below,speeding up
C)above,slowing down
D)above,constant
E)above,speeding up

Question

Quizplus · Accepted Answer

When actual unemployment is below the natural rate, it indicates that the economy is operating above its natural real GDP level, leading to increased demand for goods and services. This situation typically results in inflation speeding up due to the higher demand outpacing supply.

Suppose That the Natural Rate of Unemployment Is 5