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AP® Macroeconomics

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Monetary Policy and rGDP

APMACR-UL1YKT

Suppose the US economy had the following statistics: 3% unemployment -Real GDP growth of 4.5% and 5% inflation.

The most likely monetary response to this situation would be to

A

decrease the Reserve Requirement.

B

sell bonds on the open market.

C

buy gold.

D

increase the federal funds rate.

E

increase the prime rate.