If the Federal Reserve decreases the rate at which it increases the money supply,then unemployment is higher in
A)the long run and the short run.
B)the long run but not the short run.
C)the short run but not the long run.
D)neither the short run nor the long run.

Question

Quizplus · Accepted Answer

In the short run, decreasing the rate of money supply growth can lead to higher unemployment due to reduced economic activity. However, in the long run, the economy adjusts, and unemployment returns to its natural rate.

If the Federal Reserve Decreases the Rate at Which It