Irrespective of whether the inflation rate is high or low, if the inflation rate is above the expected level, the unemployment rate in the economy will remain stable.

Question

Quizplus · Accepted Answer

This statement is false. If the inflation rate is above the expected level, it can lead to an increase in interest rates to control inflation, which can then lead to a decrease in investments and consumption, and ultimately a rise in unemployment. In other words, high inflation can lead to an increase in unemployment if it is not managed properly.

Irrespective of Whether the Inflation Rate Is High or Low