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If Real GDP Exceeds Potential GDP,to Move the Economy to Potential

Question 22

Multiple Choice

If real GDP exceeds potential GDP,to move the economy to potential GDP the Fed


A) raises the federal funds rate to increase potential GDP but not real GDP.
B) lowers the federal funds rate to decrease real GDP but not potential GDP.
C) raises the federal funds rate to decrease real GDP but not potential GDP.
D) lowers the federal funds rate to increase potential GDP but not real GDP.
E) raises the federal funds rate to decrease both real GDP and potential GDP.

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