In Response to an Unanticipated Easing of Monetary Policy,the Fed

Multiple Choice

In response to an unanticipated easing of monetary policy,the Fed funds rate ________ at first,then ________ after 6 to 12 months.

A) rises; returns most of the way to its original value
B) falls; returns most of the way to its original value
C) remains roughly unchanged; rises significantly
D) remains roughly unchanged; falls significantly