As the output ratio falls below 100%,unemployment
A)falls and inflation rises.
B)rises and inflation falls.
C)and inflation rise.
D)and inflation fall.

Question

Quizplus · Accepted Answer

As the output ratio falls below 100%, it means that the economy is producing less than its full potential. This leads to a decrease in demand for labor, which results in higher unemployment rates. At the same time, the decrease in production leads to a decrease in demand for goods, causing a decrease in the general price level or deflation. Therefore, rising unemployment and falling inflation would be the most likely outcomes.

As the Output Ratio Falls Below 100%,unemployment