The long-run Phillips curve shows the relationship between the inflation rate and the unemployment rate when the economy is
A) in expansion.
B) at full inflation.
C) away from potential GDP.
D) in recession.
E) at full employment.
Question 2
In the market for bank reserves, if the federal funds rate target is higher than the federal funds rate, the Fed will take action to ________ reserves.
A) increase both the demand for and the supply of
B) decrease the demand for
C) decrease the supply of
D) increase the demand for
E) increase the supply of
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