Business, 14.12.2019 03:31 ob3ymysins

You are studying abroad in australia for a semester. unemployment has been creeping up and currently stands at 6%. this rate is getting a little too high for comfort, so the central bank of australia decides to do something about it. when you arrived in the country, inflation was hovering around 3% and had been at that level for a few years. the central bank’s action leads inflation to increase to 5%.a. what happens to unemployment in the short run if inflation is expected to be 0%? [it rises, it falls, or it remains the same]b. what happens to unemployment in the short run if citizens of australia have adaptive expectations? [it rises, it falls, or it remains the same]c. what happens to unemployment in the short run if citizens of australia have rational expectations? [it rises, it falls, or it remains the same]

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You are studying abroad in australia for a semester. unemployment has been creeping up and currently...

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