Figure 17-7 -Refer to Figure 17-7.In the Dynamic AD-AS Model,if the Economy

question 86

Multiple Choice

Figure 17-7
-Refer to Figure 17-7.In the dynamic AD-AS model,if the economy is at point A in year 1 and is expected to go to point B in year 2,the Federal Reserve would most likely

• A)increase interest rates.
• B)decrease interest rates.
• C)not change interest rates.
• D)increase the inflation rate.