Suppose that, in an attempt to combat severe unemployment, the government decides to increase the amount of money in circulation in the economy. This monetary policy action  ________(Decreases, Increases) demand for goods and services in the economy, leading to ________(Higher, Lower) prices for products. In the short run, the change in prices induces firms to produce ________(Fewer, morer) goods and services. This, in turn, leads to a ___________(Higher, Lower) unemployment level. Based on this analysis, the economy faces the following trade-off between inflation and unemployment: Higher inflation leads to _________(Higher, Lower) unemployment.

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