If the monthly unemployment rate increase mentioned in the Application was a temporary aberration, the best economic decision by the committee would be to
A) increase the money supply to stimulate the economy.
B) decrease the money supply to stimulate the economy.
C) decrease the money supply to slow the economy down.
D) not change monetary policy.

Question

Quizplus · Accepted Answer

If the monthly unemployment rate increase mentioned in the application was a temporary aberration, it would not be advisable to change the monetary policy. A temporary increase in unemployment rate is likely to be caused by short-term factors such as seasonal fluctuations or a temporary shock to the economy. Changing monetary policy in response to such aberrations may do more harm than good and could lead to unintended consequences. Therefore, it would be best for the committee to not change monetary policy if the increase in unemployment rate is temporary.

If the Monthly Unemployment Rate Increase Mentioned in the Application