The statement that governments cannot sustainably move the unemployment rate below the natural rate of unemployment for an extended period due to dynamics in wage bargaining is captured well by option A.
When negotiating multiyear contracts, workers are inclined to demand real wage increases equal to or greater than the expected future inflation rate. This demand arises from the desire to maintain or improve their purchasing power over time. If workers anticipate inflation, they will seek compensation that not only covers the expected increase in prices but also provides for a real wage gain.
This phenomenon is rooted in the idea that workers care about their real income, which is their nominal wage adjusted for inflation. If workers were to accept nominal wage increases that do not keep pace with inflation, their purchasing power would erode, leading to a decline in their standard of living. Therefore, to safeguard their real income, workers negotiate for nominal wage increases that at least match or exceed the expected inflation rate.
While other factors, such as labor market institutions and laws, can influence the demand for labor (as mentioned in option C), the essence of the dynamics described in option A highlights the challenge governments face in sustaining unemployment rates below the natural rate in the long term. Option D is less relevant in this context, as it pertains to lowering the natural rate of unemployment, which is distinct from the short-term manipulation of unemployment rates discussed in the question.