Author Question: Once people believe the Fed's commitment to keep unemployment at the natural rate, the Fed can ... (Read 10 times)

imowrer · **on:** Jun 30, 2018

Once people believe the Fed's commitment to keep unemployment at the natural rate, the Fed can reduce unemployment below the natural rate

A) in both the short run and the long run.
B) in both the short run and the long run, but only after changing peoples' expectations.
C) in the long run, but not the short run.
D) in the short run, but not in the long run.
E) none of the above

Question 2

Refer to the information above. Given this information, the steady state rate of growth of output is

A) 0.
B) 2.
C) 3.
D) 5.
E) 16.