Figure 35-4 
-Refer to Figure 35-4. If the economy starts at 5% unemployment and 5% inflation then if the Federal Reserve pursues a contractionary monetary policy, in the short run the economy moves to
A) 3% unemployment and 5% inflation.In the long run the economy moves to 5% unemployment and 5% inflation.
B) 3% unemployment and 5% inflation.In the long run the economy moves to 5% unemployment and 3% inflation.
C) 7% unemployment and 3% inflation.In the long run the economy moves to 5% unemployment and 5% inflation.
D) 7% unemployment and 3% inflation.In the long run the economy moves to 5% unemployment and 3% inflation.
Correct Answer:
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Q173: Other things the same, if there is
Q174: Figure 35-3 Q175: In the long run, a decrease in Q176: Suppose the Fed decreased the growth rate Q177: Assume the analysis of Friedman and Phelps Q179: If inflation expectations rise, the short-run Phillips Q180: Suppose the Federal Reserve pursues contractionary monetary Q181: Table 35-1 Q182: If the government reduced the minimum wage Q183: An adverse supply shock will shift short-run
An economist working for the
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