Unexpectedly High Inflation Reduces Unemployment in the Short Run, but as Inflation

question 116

True/False

Unexpectedly high inflation reduces unemployment in the short run, but as inflation expectations adjust the unemployment rate returns to its natural rate.

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Definitions:

Supply Curve

A visual diagram that illustrates the connection between a product's price and the amount of the product that sellers are prepared to offer.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specified period.

Decrease in Quantity

A reduction in the amount of a good or service produced or available for sale.

Gardenburgers

A brand of meatless burgers made primarily from vegetables and grains.