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-Refer to Figure 24 -1

Question 3

Multiple Choice

  -Refer to Figure 24 -1. Suppose that the economy is currently at point A, and the unemployment rate at A is the natural rate. What policy would the central bank pursue if it wanted the economy to move to point B in the long run? A)  decrease the money supply B)  raise the discount rate C)  buy treasury bills D)  no policy will move the economy to point B in the long run E)  sell treasury bills
-Refer to Figure 24 -1. Suppose that the economy is currently at point A, and the unemployment rate at A is the natural rate. What policy would the central bank pursue if it wanted the economy to move to point B in the long run?


A) decrease the money supply
B) raise the discount rate
C) buy treasury bills
D) no policy will move the economy to point B in the long run
E) sell treasury bills

Correct Answer:

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