Other things the same, if there is an increase in the money supply growth rate that is larger than expected, then in the short run
A)the natural rate of unemployment rises.
B)the natural rate of unemployment falls.
C)the unemployment rate will be above its natural rate.
D)the unemployment rate will be below its natural rate.

Question

Quizplus · Accepted Answer

An unexpected increase in the money supply growth rate typically lowers interest rates in the short run, encouraging investment and consumption, which in turn increases demand for labor. This leads to a decrease in the unemployment rate, making it fall below its natural rate temporarily.

Other Things the Same, If There Is an Increase in the Money