[challenge question] An economy is in long-run macroeconomic equilibrium with an unemployment
rate of 5% when the government passes a law requiring the central bank to use monetary policy to
lower the unemployment rate to 3% and keep it there. How could the central bank achieve this goal in
the short run? What would happen in the long run? Illustrate with a diagram.
Hi there! Click one of our representatives below and we will get back to you as soon as possible.