Use the table below to answer the following questions.
Table 28.4.1

-Refer to Table 28.4.1. The table gives points on the short-run Phillips curve for the country of Ruritania. If the expected inflation rate is 10 percent, what is the natural unemployment rate?
A)4 percent
B)5 percent
C)6 percent
D)7 percent
E)9 percent

Question

Use the table below to answer the following questions.
Table 28.4.1
 
-Refer to Table 28.4.1. The table gives points on the short-run Phillips curve for the country of Ruritania. If the expected inflation rate is 10 percent, what is the natural unemployment rate?
A)4 percent 
B)5 percent 
C)6 percent 
D)7 percent 
E)9 percent

Quizplus · Accepted Answer

The natural unemployment rate is the unemployment rate at which inflation does not change, which corresponds to the expected inflation rate. If the expected inflation rate is 10 percent, the natural unemployment rate is the one where the actual inflation rate equals the expected rate, which is 6 percent in this case.

Use the Table Below to Answer the Following Questions