During early 2001, the Fed unexpectedly increased the money supply.The effect of this policy was a

Name: During early 2001, the Fed unexpectedly increased the money supply.The effect of this policy was a
Brand: Quizplus
Rating: 4.8 (54 reviews)

Question

Quizplus · Accepted Answer

An unexpected increase in the money supply would lead to an increase in aggregate demand, causing firms to increase prices and output in the short run. This would result in an upward movement along the short-run Phillips curve, indicated by a higher level of inflation and lower unemployment.

During Early 2001, the Fed Unexpectedly Increased the Money Supply