In Milton Friedman and Edmund Phelps' expectations-augmented ...

[ss2343]

In Milton Friedman and Edmund Phelps' expectations-augmented Phillips curve, ________.
 
  A) unemployment will, in the long run, reach the natural rate
  B) in the long run, expected inflation will reach the NAIRU
  C) inflation is positively related to the unemployment gap
  D) all of the above
  E) none of the above

Question 2

If the euro replaces the U.S. dollar as the world's most popular currency, that will likely ________.
 
  A) reduce M1, without affecting M2
  B) reduce M2, without affecting M1
  C) cause a temporary increase in M1
  D) affect neither M1 nor M2
  E) none of the above

[vickybb89]

Answer to Question 1

A

Answer to Question 2

E