In the first quarter of 2022, the U.S. unemployment rate was 3.8 percent, the natural unemployment rate was 4.4 percent, and the inflation rate was 6.1 percent. How would the unemployment rate change if the Fed “crushed inflation”?
The unemployment rate would ______________ to _____________ than the natural unemployment rate.
In the first quarter of 2022, the inflation rate is above the expected inflation rate and the unemployment rate is less than the natural unemployment rate. If the Fed “crushed inflation”, the economy would move down along the short-run Phillips curve. What happens to the unemployment rate?
In the first quarter of 2022, the inflation rate is above the expected inflation rate and the unemployment rate is less than the natural unemployment rate. If the Fed “crushed inflation”, the economy would move down along the short-run Phillips curve so that the inflation rate . would fall below the expected inflation rate and the unemployment rate would increase above the natural unemployment rate.
