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b. Policy makers in the United Kingdom react forcefully when the inflation rate rises above a target rate of 2%. Why would it be harmful
b. Policy makers in the United Kingdom react forcefully when the inflation rate rises above a target rate of 2%. Why would it be harmful if inflation rose from 1.7% (the level in 2019) to, say, a level of 5%? Inflation above 2% is harmful O only if the inflation rate rises above the unemployment rate. O because the cost of bringing it down is an unacceptable increase in unemployment. O because a 2%% rate of inflation is consistent with the natural rate of unemployment, and If one rises, the other will too O only if the unemployment rate rises above the inflation rate.Unemployment and inlion - End of chapter Problem The accompanying diagram shows the inflation rate in the United Kingdom from 1980 to the present. FRED - Inflation, consumer prices for the United kingdom @ Macmillan Learning Percent 10 0 FourDE World Bank Customnian | Download Data | FELD - Economic Data from the S1. Louis Fed a. Between 1980 and 1985, policymakers in the United Kingdom worked to lower the inflation rate. What would you predict happened to unemployment between 1980 and 19857 Between 1980 and 1985, O'unemployment likely rose. O umemployment likely fell. there is no way of determining how unemployment changed
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