Which of the following approaches should the Fed use if it experiences large lags and mistakes in monetary policy?

According to this Application, which of the following is NOT a strategy that the government can pursue to address the rising cost of federal retirement and health care programs?

A) increase the age at which retirement benefits begin to be paid B) promote government saving and investment to increase real GDP over time C) borrow from the public to finance the programs D) reform the health care system to encourage more competition to reduce health care expenditures

The natural rate hypothesis states that when the inflation rate

A) increases, the unemployment rate will decrease permanently. B) changes, the unemployment rate changes temporarily and eventually returns to the natural unemployment rate. C) decreases, the inflation rate will decrease permanently. D) changes, the change is only temporary, and eventually the inflation rate returns to the natural inflation rate. E) increases, the natural unemployment rate increases.