Suppose the Federal Reserve makes monetary policy more expansionary. In the long run
a. both inflation and the unemployment rate are higher than they were prior to the change in policy.
b. inflation is higher and the unemployment rate is the same as it was prior to the change in policy.
c. inflation is lower and the unemployment rate is lower than it was prior to the change in policy.
d. inflation is lower and unemployment is the same as it was prior to the change in policy.
b
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Which of the following is the most fundamental function of government?
a. protection of individuals and their property b. imposing progressive taxes to fund income-transfer programs c. regulating prices and wages d. provision of postal services and garbage collection
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.