A) the nation's unemployment rate to be greater than the natural rate of unemployment.
B) the nation's unemployment rate to be less than the natural rate of unemployment.
C) product prices to decrease.
D) proﬁts to decrease.

Question

A) the nation's unemployment rate to be greater than the natural rate of unemployment. 
B) the nation's unemployment rate to be less than the natural rate of unemployment. 
C) product prices to decrease. 
D) proﬁts to decrease.

Quizplus · Accepted Answer

The natural rate of unemployment refers to the minimum level of unemployment that the economy can sustain without inflationary pressures. If the unemployment rate is less than the natural rate, it means that there is a shortage of workers, and firms may have to increase wages to attract workers, which could lead to inflation. Therefore, B is the correct answer. A, C, and D are incorrect because they do not necessarily follow from the given information.

A) the Nation's Unemployment Rate to Be Greater Than the Natural