Suppose that the government has been conducting policy according to the followin

Question

Suppose that the government has been conducting policy according to the following equation for some time now: Money Growth = 3% + (Unemployment Rate ?6%). If the unemployment rate is currently at 9 percent, then:

Question 11 options:

the government should increase the money supply by 6%.

the government should decrease money supply by 6%.

the government should decrease the money supply by 9 percent.

the government should increase the money supply by 9 percent.

the government should increase the money supply by 6%.

the government should decrease money supply by 6%.

the government should decrease the money supply by 9 percent.

the government should increase the money supply by 9 percent.

Explanation / Answer

Answer 11

The government should increase the money supply by 6%.

Supply = Money growh + ( current unemployment rate - unemployment rate)

= 3% + ( 9% - 6% ) = 6%

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.