The natural rate hypothesis concludes that when the inflation ...

[piesebel]

The natural rate hypothesis concludes that when the inflation rate unexpectedly increases, the unemployment rate ________.
 
  But when the higher inflation rate becomes the expected inflation rate, the unemployment rate then ________ until it reaches the ________ unemployment rate.
  A) decreases; decreases; natural
  B) increases; decreases; natural
  C) decreases; increases; natural
  D) increases; decreases; minimum
  E) decreases; increases; maximum

Question 2

If the Federal Reserve lowers the Federal funds rate,
 
  A) the price level falls.
  B) net exports decrease.
  C) other short-term interest rates rise.
  D) other short-term interest rates fall.
  E) Both answers A and C are correct.

[voltaire123]

Answer to Question 1

C

Answer to Question 2

D

[piesebel]

Thank you

[voltaire123]

No problemo