Summers Says US Risks 6% Unemployment in Inflation Fight

What is a common misconception about increased economic participation?

• It always leads to higher inflation.

• It significantly reduces inflation.

• It decreases GDP.

• It lowers unemployment rates.

Why might the Federal Reserve need to increase unemployment to control inflation?

• To decrease labor demand.

• To increase consumer spending.

• To boost GDP growth.

• To lower interest rates.

What does NAIRU stand for?

• Nominal Annual Inflation Rate of Unemployment

• Non-Adjustable Inflation Rate of Unemployment

• National Average Inflation Rate of Unemployment

• Non-Accelerating Inflation Rate of Unemployment

What is the estimated current NAIRU according to the transcript?

• 3%

• 4%

• 5%

• 6%

Why is the Fed's target of 2% inflation with 4% unemployment considered optimistic?

• Because it expects a decrease in labor demand.

• Because it predicts a rise in interest rates.

• Because it underestimates the need for higher unemployment.

• Because it assumes a decrease in GDP.