According to the AS/AD model, in the short run an increase in the federal funds rate will
A. decrease the price level and decrease real GDP.
B. increase the price level and decrease real GDP.
C. decrease the price level but leave real GDP unchanged.
D. decrease real GDP but leave the price level unchanged.
Answer:A
According to the AS/AD model, in the short run an increase in the federal funds rate will
A. decrease the price level and decrease real GDP. B. increase the price level and decrease real GDP. C. decrease the price level but leave real GDP unchanged. D. decrease real GDP but leave the price level unchanged.