If the Federal Reserve raises the federal funds rate, what is likely to happen?
a. There will be more money available for investment and growth.
b. Inflation will increase, and unemployment will decrease.
c. Both inflation and unemployment will decrease.
d. There will be less money available for investment and growth.
Question 2
Inflation is best understood as the rate at which __________.
a. gross domestic product expands ---
b. prices for goods and services decrease
c. prices for goods and services increase
d. the federal government increases taxes to raise revenue
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