According to Phelps and Friedman, in the Short Run, What

question 95

Multiple Choice

According to Phelps and Friedman, in the short run, what effect does an increase in the money supply have on prices and unemployment?

• A) It raises prices and unemployment.
• B) It raises prices and reduces unemployment.
• C) It reduces prices and raises unemployment.
• D) It reduces prices and leaves unemployment unchanged.

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Definitions:

Reactive Intermediate Species

Highly reactive molecules or ions formed transiently in the course of a chemical reaction, which go on to react further to form the final products.

Sp3 Hybridization

A form of orbital hybridization in which one s orbital and three p orbitals mix to form four equivalent sp3 hybrid orbitals, typically found in tetrahedral molecular geometries.

Monochlorinated Products

Chemical compounds obtained by adding a single chlorine atom to a molecule, often as intermediates in organic synthesis or in the production of insecticides and solvents.

Chlorine Radical

A reactive atom of chlorine that possesses an unpaired electron, making it extremely reactive with other substances.