When unexpected inflation is zero, the corresponding unemployment rate is not zero because:
A)cyclical unemployment is high and positive.
B)the output gap is negative.
C)the output gap is positive.
D)structural unemployment and frictional unemployment are not zero.

Question

Quizplus · Accepted Answer

Structural and frictional unemployment are not influenced by changes in inflation, as they are caused by factors such as changes in technology or shifts in the labor market. Therefore, even if inflation is unexpected and low, there will still be some level of unemployment due to these factors.

When Unexpected Inflation Is Zero, the Corresponding Unemployment Rate Is