If the misery index is 12 and the inflation rate is 4 percent,we can conclude
A)The inflation rate will quickly rise by 8 percent.
B)The unemployment rate must be 8 percent.
C)The AD curve must be shifting to the right.
D)Monetary policy is not succeeding at keeping inflation low.

Question

Quizplus · Accepted Answer

The misery index is calculated by adding together the inflation rate and the unemployment rate. If the misery index is 12 and the inflation rate is 4 percent, then the unemployment rate must be 8 percent (12=4+8). Therefore, choice B is the correct answer. Choices A, C, and D are not necessarily true based on the given information.

If the Misery Index Is 12 and the Inflation Rate