If, when recovering from an inflationary period, the inflation rate declines and the unemployment rate also declines, this could be the result of

Question

Quizplus · Accepted Answer

When aggregate supply increases at a faster rate than aggregate demand decreases, prices will decrease (or increase at a slower rate), leading to a decline in the inflation rate. At the same time, as output increases, firms will need to hire more workers, leading to a decline in the unemployment rate. Therefore, A is the best choice.

If, When Recovering from an Inflationary Period, the Inflation Rate