
-In the above figure, if the economy is initially at point c, the short-run effect of a hike in the federal funds rate is given by movement from point
A) c to point d, decreasing output and increasing the unemployment rate.
B) c to point d, increasing output and decreasing the unemployment rate.
C) c to point b, increasing output and decreasing the unemployment rate.
D) c to point a, keeping output and the unemployment rate constant.
Correct Answer:
Verified
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