Prime Minister Emma Bigshot urges passage of a bill to reduce unemployment benef

Question

Prime Minister Emma Bigshot urges passage of a bill to reduce unemployment benefits from very generous levels in her country. She also urges her country's central bank to raise the rate at which the money supply is increasing. In the long run which, if either, of these policies will reduce the unemployment rate? 1. neither reducing the generosity of unemployment benefits nor raising the rate at which the money supply is increasing 2. raising the rate at which the money supply is increasing, but not reducing the generosity of unemployment benefits 3. reducing the generosity of unemployment benefits but not raising the rate at which the money supply is increasing 4. both reducing the generosity of unemployment benefits and raising the rate at which the money supply is increasing

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