Question

g If expected inflation equals zero, and currently actual inflation is equal to expected inflation, the short run Phillips Curve will most likely intersect the horizontal axis at:Group of answer choicesa zero (0) percent unemployment rate.a 3% unemployment rate.a 2% unemployment rate.the natural rate of unemployment.

Answer 1

Answer:

the natural rate of unemployment.

Explanation:

In simple words, If inflation expectations is equivalent to 0, and inflation rate is currently equal to expected inflation, the short run Phillips Curve will most likely intersect the horizontal axis at natural unemployment rate.

A point where the Phillips curve intersects the horizontal axis is the rate of unemployment consistent with stable price, known as the Non-accelerating unemployment rate (NAIRU), also known as the 'natural unemployment rate.'