In an economy experiencing a very low rate of unemployment, businesses find it increasingly difficult to hire new staff and retain their current employees. If these businesses respond by increasing the nominal wages they offer, what is the most likely subsequent chain of events?

An economy is operating with an unemployment rate significantly below its long-run equilibrium. Arrange the following events into the logical sequence that describes the resulting inflationary pressure.

Analyzing an Economic Boom

Explaining the Link Between Low Unemployment and Inflation