According to the short run Phillips Curve model,if the inflation rate is above the rate anticipated by the general public,then
A) the unemployment rate will be equal to the non-inflation-accelerating rate of unemployment (NIARU)
B) the unemployment rate will be at the natural rate
C) the unemployment rate will probably be exceptionally low
D) there will most likely be substantial cyclical unemployment in the economy
E) an adverse aggregate supply shock has created both inflation and unemployment

Question

Quizplus · Accepted Answer

In the short run Phillips Curve model, if the inflation rate is higher than what the public anticipates, it typically means that the economy is overheating, leading to lower unemployment rates as demand for labor increases. This situation does not necessarily align with the natural rate of unemployment (NIARU) or indicate substantial cyclical unemployment or an adverse aggregate supply shock.

According to the Short Run Phillips Curve Model,if the Inflation