In the short run, which of the following is the most likely effect of an unanticipated move to a more expansionary monetary policy?
a. an increase in employment
b. a decrease in employment
c. an increase in the velocity of money
d. an increase in prices proportional to the rise in the money supply
A
Economics
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According to the Taylor rule, if the inflation rate is one percentage point below the target of 2%, then the Fed should:
A. Raise the real federal funds rate by one percentage point B. Lower the real federal funds rate by one percentage point C. Raise the real federal funds rate by half of a percentage point D. Lower the real federal funds rate by half of a percentage point
Economics