An increase in the inflation rate permanently reduces the natural rate of unemployment.

Name: An increase in the inflation rate permanently reduces the natural rate of unemployment.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The natural rate of unemployment is determined by factors such as the structure of the labor market and labor market policies, not by the rate of inflation. Inflation affects the short-term cyclical unemployment but does not permanently alter the natural rate of unemployment.

An Increase in the Inflation Rate Permanently Reduces the Natural