When adaptive expectations are used to model inflation expectations in the Phillips curve, then the natural rate of unemployment is called the ______ rate of unemployment.
A) structural
B) cyclical
C) short-run aggregate supply
D) nonaccelerating inflation

Question

Quizplus · Accepted Answer

When adaptive expectations are used, the natural rate of unemployment in the Phillips curve is referred to as the nonaccelerating inflation rate of unemployment (NAIRU), which represents the rate of unemployment at which the economy exhibits stable or constant inflation expectations.

When Adaptive Expectations Are Used to Model Inflation Expectations in the Phillips