Other things the same,if the central bank decreases the rate at which it increases the money supply,then
A)unemployment and inflation rise in the short run.
B)unemployment rises and inflation falls in the short run.
C)unemployment falls and inflation rises in the short run.
D)unemployment and inflation fall in the short run.

Question

Quizplus · Accepted Answer

If the central bank decreases the rate at which it increases the money supply, it is tightening monetary policy, which can lead to a decrease in inflation rates. However, this can also lead to higher interest rates, which can reduce investment and lead to higher unemployment rates in the short run.

Other Things the Same,if the Central Bank Decreases the Rate