If the central bank increases the growth rate of the money supply and initially inflation expectations are unchanged, then in the short run
a. unemployment rises. In the long run the short-run Phillips curve shifts left.
b. unemployment rises. In the long run the short-run Phillips curve shifts right.
c. unemployment falls. In the long run the short-run the Phillips curve shifts left.
d. unemployment falls. In the long run the short-run the Phillips curve shifts right.
d
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Which of the following illustrates the medium-of-exchange function of money?
A) writing a check to buy a new Volkswagen B) noting that the price of a $20,000 Volkswagen is 16,000 euros C) keeping $20,000 in cash in your mattress instead of buying a new Volkswagen D) driving your $20,000 Volkswagen to a friend's house
Which of the following factors would tend to increase the size of the premium on an options contract?
A) The option is near its expiration date. B) The current default-risk-free interest rate is high. C) The price volatility of the underlying asset is low. D) The option is far away from its expiration date.