Multiple Choice
During 1999 and 2000 the Federal Open Market Committee of the Federal Reserve System noted that productivity increases had caused aggregate supply to shift to the right.Other things the same,this should have
A) shifted the short-run Phillips curve to the left.So, by increasing the money supply the Fed could have reduced unemployment further while returning inflation to its former level.
B) shifted the short-run Phillips curve to the left.So, by increasing the money supply the Fed could have reduced unemployment further only by raising the inflation rate above its former level.
C) shifted the short-run Phillips curve to the right.So, by increasing the money supply the Fed could have reduced unemployment further while returning inflation to its former level.
D) None of the above is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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