Suppose that the IS curve is stable and money demand is lower than forecasted.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 from
C) below,left,return to
D) above,left,fall back from
E) above,right,rise further from
Correct Answer:
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