If unemployment is below its natural rate, what happens to move the economy to l
ID: 298583 • Letter: I
Question
If unemployment is below its natural rate, what happens to move the economy to long -run equilibrium? Inflation expectation rise which shifts the short - run Phillips curve to the right Inflation expectation rise which shifts the short - run Phillips curve to the left Inflation expectation rise which shifts the short - run Phillips curve to the right Inflation expectation fall which shifts the short - run Phillips curve to the left Which of the following is correct if there is an adverse supply shock? The short-run aggregate supply curve and the short-run Phillips curve both shift right. The short-run aggregate supply curve and the short-run Phillips curve both shift left. The short-run aggregate supply curve shifts right and the short-run Phillips curve shifts left. The short-run aggregate supply curve shifts left and the short-run Phillips curve shifts right. If the Fed wants to reverse the effects of an adverse supply shock on unemployment, it should increase the money supply growth rate which raises the inflation rate. increase the money supply growth rate which reduces the inflation rate. decrease the money supply growth rate which raises the inflation rate. decrease the money supply growth rate which reduces the inflation rate. Other things the same, if the central bank decreases the rate at which it increases the money supply that unemployment and inflation rise in the short run. unemployment rises and inflation falls in the short run. unemployment falls and inflation rises in the short run. unemployment and inflation fall in the short run. Contractionary monetary policy leads to disinflation and makes the short-run Phillips curve shift right. leads to disinflation and makes the short-run Phillips curve shift left. does nor lead to disinflation but makes the short-run Phillips curve shift right. does not lead to disinflation but makes the short-run Phillips curve shift left.Explanation / Answer
44) d.raised inflation and reduced unemployment.
Unemployment and corresponding rates of inflation are inversely proportional in the short run..