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If the Fed Wants to Reverse the Effects of a Favorable

Question 6

Multiple Choice

If the Fed wants to reverse the effects of a favorable supply shock on unemployment,it should


A) increase the money supply growth rate which raises the inflation rate.
B) increase the money supply growth rate which reduces the inflation rate.
C) decrease the money supply growth rate which raises the inflation rate.
D) decrease the money supply growth rate which reduces the inflation rate.

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