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If the Unemployment Rate Falls Below the Natural Rate of Unemployment

Question 79

Multiple Choice

If the unemployment rate falls below the natural rate of unemployment (u*) ,


A) the government will want to conduct expansionary fiscal policy.
B) the Federal Reserve will want to conduct expansionary monetary policy.
C) the economy is in a recession.
D) there will be no worries about inflation.
E) the government will want to conduct contractionary fiscal policy.

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