In the Short Run, an Expansionary Monetary Policy by the Fed

question 61

Multiple Choice

In the short run, an expansionary monetary policy by the Fed would:

• A)reduce unemployment at the cost of higher inflation.
• B)reduce inflation at the cost of a rise in the natural rate of unemployment.
• C)reduce inflation and leave the natural unemployment rate unchanged.
• D)reduce both inflation and unemployment.
• E)increase both inflation and unemployment.