Facing an inflationary gap, an increase in the overnight rate results in a(n)
A) increase in both real GDP and the price level.
B) increase in real GDP, but a fall in the price level.
C) increase in real GDP, but no change in the price level.
D) rise in the price level, but no change in real GDP.
E) fall in both the price level and real GDP.
Correct Answer:
Verified
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