The long run natural rate of unemployment is 5%. The current rate of unemployment is 3% what do we expect to happen if no policy is used.
If no policy is used in the long run we would expect unemployment to [increase, decrease, stay the same]
If no policy is used in the long run we would expect the CPI to [increase, decrease, stay the same]
A. Both unemployment and CPI increase
B. Unemployment increases and CPI decreases
C. Unemployment decreases and CPI decreases
D. Unemployment decreases and CPI increase