Question

Suppose that the economy is currently at point A and the unemployment rate at a is the natural rate what policy with the federal reserve pursue if it wanted the economy to move to point C in the long run

Answer 1

Answer: No policy will move the economy to point B in the long run.

Step-by-step explanation:

The unemployment state which is natural has it effects on the economy of a state. For the economy to thrive there have to be involvement of labour where people are more employed to carry out operations, this is what would make any policy decided to move.