Question

According to economists, the inflation rate is consistent with which of the following in the long run?

A. The national deflation rate
B. The aggregate demand rate
C. The aggregate supply rate
D. The natural employment rate

Answer 1

The inflation rate is consistent with the aggregate supply rate in the long run, according to economists. The natural rate of unemployment, which is the rate that the economy adjusts back to after changes, can be consistent with different rates of inflation. So, the correct answer is option c.

Step-by-step explanation:

The inflation rate is consistent with The aggregate supply rate in the long run. According to economists, the long-run Phillips curve suggests that there is always a temporary trade-off between inflation and unemployment. The natural rate of unemployment, which represents the unemployment rate on the long-run Phillips curve, is the rate that the economy adjusts back to after changes. A variety of different rates of inflation can be consistent with the natural rate of unemployment. So, the correct answer is option c.