The Natural Rate Hypothesis Concludes That When the Inflation Rate

question 6

Multiple Choice

The natural rate hypothesis concludes that when the inflation rate _{--------------------} unexpectedly increases, the unemployment rate . But when the higher inflation rate becomes the expected inflation rate, the unemployment rate then _{--------------------}until it reaches the _{--------------------} unemployment rate.

• A)decreases; increases; natural
• B)decreases; increases; maximum
• C)decreases; decreases; natural
• D)increases; decreases; natural
• E)increases; decreases; minimum

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Definitions:

Satisficing Heuristic

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