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Suppose the Economy Is Producing at the Natural Rate of Output

Question 35

Multiple Choice

Suppose the economy is producing at the natural rate of output. An open market sale of bonds by the Fed will cause ________ in real GDP in the short run and ________ in inflation in the short run,everything else held constant.


A) an increase;an increase
B) a decrease;a decrease
C) no change;an increase
D) no change;a decrease

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