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According to the AS/AD Model, in the Short Run an Increase

Question 169

Multiple Choice

According to the AS/AD model, in the short run an increase in the federal funds rate will


A) decrease the equilibrium price level and decrease equilibrium real GDP.
B) decrease the equilibrium price level but leave equilibrium real GDP unchanged.
C) decrease equilibrium real GDP but leave the equilibrium price level unchanged.
D) increase the equilibrium price level and decrease equilibrium real GDP.

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