-An Economy?s Natural Unemployment Rate Is 4 Percent

question 256

Multiple Choice

$$\begin{array} { | l | l | } \hline \begin{array} { l } \text { Inflation rate } \\\text { (percent per year) }\end{array} & \begin{array} { l } \text { Unemployment rate } \\\text { (percent) }\end{array} \\\hline 8 & 3 \\\hline 6 & 4 \\\hline 4 & 5 \\\hline 2 & 6 \\\hline\end{array}$$
-An economy?s natural unemployment rate is 4 percent. The table above gives some points on the economy?s short-run Phillips curve. When the unemployment rate is 4 percent___________ .

• A) and the inflation rate is 6 percent a year, the short-run and long-run Phillips curves intersect
• B) actual inflation is less than expected inflation
• C) actual inflation is greater than expected inflation
• D) and the expected inflation rate is 8 percent a year, the short-run Phillips curve shifts downward

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An introductory statement intended to soften the impact of the message that follows.

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A communication technique in which the main point or message is not presented immediately but introduced gradually in the context.