When the money supply increases,

Group of answer choices

Nominal interest rates increase.

None of the other answers are correct.

Real interest rates increase.

There will be no effect on interest rates when the economy is in a liquidity trap.

When there is slack in the economy, policy can increase AD and move the economy to the NAIRU along a stable Phillips Curve so long as

Group of answer choices

Expected inflation is greater than actual inflation

Expected inflation is less than actual inflation

Expected inflation is stable

None of the other answers are correct.

At the NAIRU, the modern Phillips Curve is

Group of answer choices

Vertical.

Flat.

Upward-sloping.

Downward-sloping.