A country's government implements a series of expansionary policies over several years, successfully keeping the unemployment rate at 2%, a level considered to be well below its sustainable long-run potential. In the first year of this policy, the annual inflation rate rises from 2% to 5%. If the government is committed to maintaining the 2% unemployment rate indefinitely, what is the most probable long-term consequence for the inflation rate?

A government successfully implements policies that hold the unemployment rate below what is considered its long-run sustainable level. Arrange the following economic events in the most likely chronological sequence that would occur if this policy is maintained over several years.

Policy Dilemma and Inflation Dynamics