If the central bank raises the rate at which it increases the money supply,then in the short run unemployment is
A)above its natural rate.The short-run Phillips curve shifts right as the economy moves back to its natural rate of unemployment.
B)above its natural rate.The long-run Phillips curve shifts left as the economy moves back to its natural rate of unemployment.
C)below its natural rate.The short-run Phillips curve shifts right as the economy moves back to its natural rate of unemployment.
D)below its natural rate.The long-run Phillips curve shifts left as the economy moves back to its natural rate of unemployment.

Question

Quizplus · Accepted Answer

Increasing the money supply can temporarily lower unemployment below its natural rate, causing the short-run Phillips curve to shift right as inflation expectations adjust.

If the Central Bank Raises the Rate at Which It