Suppose that the central bank for this economy has decided that inflation is too high and thus wants to decrease the inflation rate by 6 percentage points per year. A reduction in the rate of inflation is known as To reduce inflation from 8% to 2% in the short run, the central bank would have to accept an unemployment rate of True or False: If people have rational expectations, the sacrifice ratio could be much higher than suggested by the short-run Phillips curve. O True O False7. The costs of disinflation The following graph plots the short-run and long-run Phillips curves (SRPC and LRPC, respectively) for an economy currently experiencing long-run macroeconomic equilibrium at point A, where the natural unemployment rate is 6% and the inflation rate is 8% per year, 70 LRPC 14 INFLATION RATE (Percent) SRPC 10 UNEMPLOYMENT RATE (Percent)