Answer to Question #246438 in Macroeconomics for Prisca Mahlalela

Question

According to the short-run Phillips curve, which of the following will occur when the SARB increases 

the money supply?

A. Both the unemployment rate and the inflation rate will increase.

B. Both the unemployment rate and the inflation rate will decrease.

C. The unemployment rate will decrease.

D. The inflation rate will decrease.

Answer 1

C. The unemployment rate will decrease.