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suppose the measured unemployment rate is 6.1% and the true natural rate of unemployment is 5.1%. If the chair of the Fed believes the natural
suppose the measured unemployment rate is 6.1% and the true natural rate of unemployment is 5.1%. If the chair of the Fed believes the natural rate of unemployment to be 6.7%, then the chair will
a) slow the economy, exactly as called for.
b) stimulate the economy, exactly as called for.
c) slow the economy when it should be stimulated.
d) stimulate the economy when it should be slowed.
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