The Fed is fighting recession and it happens to overstimulate the economy. If the expected inflation rate rises above the 2 percent goal, what is the cost of returning the inflation rate back to its goal?   The cost of returning the inflation rate back to its goal is _______.     A. an inflationary gap and an even higher inflation rate than initially   B. unemployment below the natural unemployment rate   C. a decrease in potential GDP and aggregate supply   D. a recessionary gap and a higher unemployment rate

Q: pending (b) deacrese

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Unemployment and Cost of Unemployment

Unemployment is the state of being unemployed, even when an individual is actively seeking work opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed.