Suppose That Last Year the Economy of Suffera Was Experiencing

Multiple Choice

Suppose that last year the economy of Suffera was experiencing an expected inflation rate of 8 percent and unemployment rate of 12 percent. An unanticipated increase in the inflation rate would

A) increase the inflation rate but have no effect on the unemployment rate.
B) increase the inflation rate and decrease the unemployment rate.
C) increase the unemployment rate.
D) None of the above answers is correct.