An increase in the natural rate of unemployment shifts the short-run Phillips curve to the _____. If the central bank sees the increase in the unemployment rate, but thinks the natural rate has remained the same and so wants to reduce unemployment, it would ________ the money supply growth rate. If it maintains this money supply growth rate, eventually the short run Phillips curve will shift
_____ and unemployment will be _____.
Fill in the blank(s) with correct word
right, increase, right, higher (return to its new natural rate)
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What will be an ideal response?
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