Which of the following models imply that a decrease in the money supply reduces unemployment temporarily but not permanently?
A)both the long-run Phillips curve and the aggregate supply and aggregate demand model.
B)the aggregate demand and aggregate supply model,but not the long-run Phillips curve.
C)the long-run Phillips curve,but not the aggregate demand and aggregate supply model.
D)neither the long-run Phillips curve nor the aggregate supply and aggregate demand model.

Question

Quizplus · Accepted Answer

Both the long-run Phillips curve and the aggregate supply and aggregate demand model suggest that monetary policy can affect unemployment in the short run but not in the long run. In the long run, the economy returns to its natural rate of unemployment.

Which of the Following Models Imply That a Decrease in the Money