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    Principles of Economics Study Set 8
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    Exam 35: The Short-Run Tradeoff Between Inflation and Unemployment
  5. Question
    A Central Bank Raises the Money Supply Growth Rate and Keeps
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A Central Bank Raises the Money Supply Growth Rate and Keeps

Question 108

Question 108

Short Answer

A central bank raises the money supply growth rate and keeps it higher. As the economy moves from the short-run equilibrium created by the increase in the money supply growth back to long-run equilibrium what happens to the unemployment rate?

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