Multiple Choice
You are an economic adviser using the Fed model to analyze the economy. What is the effect of a rise in the risk premium in the economy?
A) a rise in the real interest rate, falling output, and unexpected deflation
B) a rise in the real interest rate, rising output, and unexpected inflation
C) a fall in the real interest rate, falling output, and unexpected deflation
D) a fall in the real interest rate, rising output, and unexpected inflation
Correct Answer:
Verified
Correct Answer:
Verified
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