Day: November 30, 2022

The natural rate of unemployment in an economy is 5%.

What will happen if a government persists in trying to achieve a target rate of unemployment of 3% by expansionary monetary policy?

Select ONE answer:

1. an accelerating rate of inflation
2. a diminishing rate of inflation
3. a high but constant rate of inflation
4. a negative rate of inflation

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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