Multiple Choice
The inflation rate has been 3 percent per year for several years, and the unemployment rate has been stable at 5 percent. Unexpected changes in monetary policy cause the inflation rate to increase to 6 percent. In the short run, the unemployment rate will
A) increase to 8 percent.
B) decrease.
C) increase, but the exact amount cannot be known for sure.
D) remain constant.
Correct Answer:
Verified
Correct Answer:
Verified
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