× Didn't find what you were looking for? Ask a question
Top Posters
Since Sunday
c
6
l
5
h
5
h
5
k
5
t
5
h
4
B
4
w
4
g
4
e
4
b
4
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
darla darla
wrote...
Posts: 305
Rep: 0 0
5 years ago
Suppose a presidential candidate makes a statement in a debate whereby he promises that he would encourage the Fed to permanently lower the unemployment rate to 3%. His opponent claims that this type of policy idea is mired in the 1960s and would only cause inflation.  Explain what the oAnswer: means.
Textbook 
InMacro

InMacro


Edition: 1st
Authors:
Read 77 times
1 Reply

Related Topics

Replies
wrote...
#1
5 years ago
means.
Answer: An increase in the money supply will raise GDP above potential GDP and lower the unemployment rate below the natural rate in the short run. To attempt to keep the level of GDP above potential continuously in the long run, and subsequently keep the unemployment rate permanently below the natural rate, the Fed would have to continuously keep raising the money supply.  This would be inflationary.
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1390 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 1701
  
 179
  
 395
Your Opinion
Which 'study break' activity do you find most distracting?
Votes: 824
Previous poll results: What's your favorite funny biology word?