Asked by Kolby Finnie on May 11, 2024
Verified
From 2008-2009 the Federal Reserve created a very large increase in the money supply. According to the short-run Phillips curve this policy should have
A) raised inflation and unemployment.
B) raised inflation and reduced unemployment.
C) reduced inflation and raised unemployment.
D) reduced inflation and unemployment.
Phillips Curve
A macroeconomic model describing an inverse relationship between rates of unemployment and corresponding rates of inflation, suggesting that inflation and unemployment have a stable and inverse relationship.
Federal Reserve
The central bank of the United States, responsible for regulating the US monetary and financial system.
Money Supply
The comprehensive pool of financial assets in an economy at any given time, which includes coins, cash, and the amounts in both checking and savings accounts.
- Learn the consequences that fiscal and monetary policy exert on inflation, unemployment, and aggregate demand within a short-run scope.
Verified Answer
Learning Objectives
- Learn the consequences that fiscal and monetary policy exert on inflation, unemployment, and aggregate demand within a short-run scope.
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