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    Macroeconomics Study Set 40
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    Exam 12: U.S. Inflation, Unemployment, and Business Cycle
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    If the Economy Is at Potential GDP and the Fed
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If the Economy Is at Potential GDP and the Fed

Question 323

Question 323

Multiple Choice

If the economy is at potential GDP and the Fed increases the quantity of money, then


A) real GDP rises temporarily above potential GDP.
B) real GDP rises permanently above potential GDP.
C) potential GDP and real GDP both decrease.
D) potential GDP rises.

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