One News Wire article in the text has the title "Fed Cuts Key Interest Rate Half-Point to 1 Percent." Assuming the economy is in the upward sloping portion of the eclectic aggregate supply curve,what should happen to the price level and output as a result of the Fed's action,ceteris paribus?
A) The equilibrium price level and equilibrium output should both increase.
B) The equilibrium price level should increase and equilibrium output should decrease.
C) The equilibrium price level should decrease and equilibrium output should increase.
D) The equilibrium price level and equilibrium output should both decrease.
Correct Answer:
Verified
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