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Suppose each of the following rows represents the choice faced by policy makers given the current set of U.S. institutions and technology. What is the opportunity cost of reducing unemployment from 8 percent to 4 percent?

Unemployment Inflation
10 5
3 5
8 7
4 4
6 10

A. 6 percentage points of unemployment
B. 4 percentage points of unemployment
C. 4 percentage points of inflation
D. 6 percentage points of inflation

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Answer:

Option "C" is correct

Explanation:

Bringing down the inflation level will help sort money circulation and in turn achieving the unemployment goal.

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