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1) Assume that the expected rate of inflation is constant, and the unemployment rate has been higher than the natural rate of unemployment for a

1) Assume that the expected rate of inflation is constant, and the unemployment rate has been higher than the natural rate of unemployment for a number of years. Which is the correct answer?

a) The rate of inflation will approximately be equal to zero.

b) The rate of inflation should steadily decrease over time.

c) The inflation rate will be approximately equal to the natural rate of unemployment.

d) The rate of inflation should neither increase nor decrease.

e) The rate of inflation should steadily increase.

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