Which of the Following Is Likely the Most Significant Implication

question 57

Multiple Choice

Which of the following is likely the most significant implication of the natural rate of unemployment hypothesis?  

• A) The natural rate of inflation tends toward zero. 
• B) Long-run policy should be directed toward controlling inflation rather than unemployment. 
• C) The natural rate of unemployment can be reduced if policymakers accept worsening inflation. 
• D) The natural rate of unemployment is consistent only with a zero inflation rate in the long run.

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Definitions:

Competitive Labor Market

A market where numerous buyers and sellers interact to determine the price and quantity of labor, ensuring no single entity can dictate the market terms.

Wage Discrimination

The practice of paying different wages to workers who perform similar tasks, based on non-performance-related factors such as race, gender, religion, or nationality.

Complaint

An expression of dissatisfaction or a formal accusation against a party, product, or service.

Profit Maximization

The process by which a firm determines the price and output level that returns the greatest profit, considering the cost and demand functions.