AC KNOWLEDGE CHECK ranscript Here is the output gap in the U.S. in early 1975. What was likely the Fed interest rate policy? ME n1 112 To cut interest rates as that would decrease the cost of goods produced To hike interest rates as that would decrease the cost of goods produced To hike interest rates as that would increase the cost of goods produced To cut interest rates as that would increase the cost of goods produced nd Click to open/close chart