In the monetarist view, if the money supply has been rising too quickly for years, the resulting inflation can be brought under control by slowing money growth. This will
a. quickly reduce inflation with no side effects.
b. quickly reduce inflation with higher unemployment.
c. increase unemployment depending upon how quickly the public changes their expected price level.
d. slowly reduce inflation with higher unemployment.
e. both c and d.
Question 2
Assuming imperfect perfect capital mobility, the BP schedule is
a. vertical.
b. horizontal.
c. upward sloping.
d. downward sloping.
e. flat.
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