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If the economy is in equilibrium at the natural rate of unemployment and the Fed pursues an expansionary monetary policy, which of the following will
If the economy is in equilibrium at the natural rate of unemployment and the Fed pursues an expansionary monetary policy, which of the following will the monetarists predict?
a The economy will move to a temporary equilibrium at a lower level of unemployment and a higher level of GDP
b The economy will move to a longrun equilibrium at a lower level of unemployment and a higher level of GDP
c The economy will move to a longrun equilibrium at the same level of unemployment and the same level of GDP but a higher price level.
d The equilibrium in the economy will not change.
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