One News Wire Article in the Text Has the Title

question 114

Multiple Choice

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.

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