According to the Natural Rate Hypothesis

question 175

Multiple Choice

According to the natural rate hypothesis:

• A)once inflation is built into expectations, a policy aimed at lowering unemployment below the natural rate would lead to accelerating inflation.
• B)the natural rate of unemployment is above the NAIRU.
• C)once inflation is embedded in the public's expectations, it will stop accelerating.
• D)changes in discretionary policy aimed at increasing GDP will have no impact on inflation expectations.

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