According to the AS/AD Model, in the Short Run an Increase

question 7

Multiple Choice

According to the AS/AD model, in the short run an increase in the federal funds rate will

• A) decrease the equilibrium price level and decrease equilibrium real GDP.
• B) decrease the equilibrium price level but leave equilibrium real GDP unchanged.
• C) decrease equilibrium real GDP but leave the equilibrium price level unchanged.
• D) increase the equilibrium price level and decrease equilibrium real GDP.

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