In the long run, the inflation rate
A) is equal to the natural inflation rate.
B) is zero.
C) can take on any value.
D) must be equal to the natural unemployment rate.
E) cannot be negative.

Question

Quizplus · Accepted Answer

In the long run, the inflation rate is influenced by various factors such as money supply, natural resources, productivity, and economic policies. Therefore, it can take on any value in the long run, depending on these factors. It is not necessarily equal to the natural inflation rate or zero, nor does it have to be equal to the natural unemployment rate. However, it cannot be negative, as prices cannot fall below zero.

In the Long Run, the Inflation Rate