Answer to Question #247057 in Macroeconomics for Pearl

Question

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

Group of answer choices

The inflation rate will decrease.

Both the unemployment rate and the inflation rate will increase.

The unemployment rate will decrease.

Both the unemployment rate and the inflation rate will decrease.

Answer 1

None of other options

Explanation : The increased money supply would result in higher inflation but lower unemployment rate in the long run.