The central bank of the United States, the Federal Reserve System, decides to pump

more money into the economy in response to the current recession. Carefully describe and explain the short-run effects of monetary injections on inflation and unemployment.

a. Short-run impact of monetary injections (i.e. increased money supply) on inflation

b. Short-run impact of monetary injections on unemployment

c. What kind of relationship do you observe between unemployment and inflation in the

short run, positive, negative, or not related?