Refer to the Above Diagram

question 66

Multiple Choice

Refer to the above diagram.Assume that the natural rate of unemployment is 7.5 percent and that the economy is initially operating at point a where the expected and actual rates of inflation are each 6 percent.If the actual rate of inflation unexpectedly falls from 6 percent to 4 percent, then the unemployment rate will:

• A)temporarily fall from 7.5 percent to 4 percent.
• B)permanently fall from 7.5 percent to 4 percent.
• C)temporarily rise from 7.5 percent to 9.5 percent.
• D)permanently rise from 7.5 percent to 9.5 percent.

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Definitions:

Insurance Agent

A professional authorized to sell and service insurance policies, representing either one or multiple insurance companies.

Annuity

A monetary tool that disburses a set sequence of payments to a user, predominantly aimed at serving as a financial resource for retirees.

Rate Of Return

The upward or downward movement in an investment's value across a defined duration, detailed as a percentage of its initial expenditure.

Insurance Agent

A professional who sells, solicits, or negotiates insurance policies on behalf of an insurer.