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Question
Refer to the above figure. Unexpected contractionary monetary policy has caused the aggregate demand curve to shift to AD2. In the long run,
A) the unemployment rate will be the same rate as before the expansionary monetary policy.
B) the unemployment rate will be larger than the rate before the expansionary monetary policy.
C) the unemployment rate will be smaller than the rate before the expansionary monetary policy.
D) the unemployment rate can increase or decrease depending upon how much the LRAS will shift.
Answer
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Related questions
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The United Statesʹ balance of payments is likely to improve whenA) there is an increase in political instability in other countries.B) the inflation rate in the United States rises relative to other countries.C) the American government increases its spending on foreign aid. D) American people want to invest more in foreign countries.