Asked by Ashley Eggleston on May 04, 2024
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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?
Money Supply Growth
The rate at which the total amount of monetary assets in an economy increases over time, which can influence inflation, interest rates, and economic growth.
Unemployment Rate
The proportion of the labor force that is not currently employed but is actively looking for work and willing to work.
- Assess the long-standing consequences of adjustments in the money supply on inflation rates and unemployment figures.
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SH
Learning Objectives
- Assess the long-standing consequences of adjustments in the money supply on inflation rates and unemployment figures.