If households and businesses correctly anticipate the inflation rate, the unemployment rate

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If households and businesses anticipate the inflation rate correctly, they will make reasonable price and wage adjustments, resulting in a stable labor market. As a result, the unemployment rate will be equal to the natural rate of unemployment, which is the rate of unemployment that corresponds to structurally determined frictions and points to a healthy functioning economy.

If Households and Businesses Correctly Anticipate the Inflation Rate, the Unemployment