All else equal, country A has a higher money supply growth rate and a long-run Phillips curve that is farther to the left than country B's. In the long run as compared to country B, country A will have

Question

Quizplus · Accepted Answer

In the long run, a higher money supply growth rate leads to higher inflation, and a long-run Phillips curve farther to the left indicates lower natural unemployment. Thus, country A will have lower unemployment and higher inflation compared to country B.

All Else Equal, Country a Has a Higher Money Supply