According to Friedman and Phelps,the unemployment rate is above the natural rate when actual inflation
A)is greater than expected inflation.
B)is less than expected inflation.
C)equals expected inflation.
D)low whether its greater than or less than expected.

Question

Quizplus · Accepted Answer

According to Friedman and Phelps, when actual inflation is less than expected inflation, firms and workers are caught off guard, leading to higher unemployment as the economy adjusts.

According to Friedman and Phelps,the Unemployment Rate Is Above the Natural