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Suppose Commodity Demand Is Stronger Than Expected,and Money Demand Is

Question 124

Multiple Choice

Suppose commodity demand is stronger than expected,and money demand is stable.If the Fed is targeting the interest rate,it notices the rate is ________ its target,and action to correct this,shifting the LM curve to the ________,causes GDP to ________ natural GDP.


A) below,right,fall back toward
B) below,right,rise further toward
C) below,left,rise further from
D) above,left,fall back from
E) above,right,rise further from

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