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Suppose the Economy Is Growing Faster Than Its Long-Run Potential

Question 191

Multiple Choice

Suppose the economy is growing faster than its long-run potential growth rate.To bring the real growth rate back to the long-run potential rate,the Fed should:


A) lower the required reserve ratio.
B) buy government bonds in the open market.
C) raise the discount rate.
D) lower the interest rate on reserves.

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