content area top Part 1 The U.S. economy is at full employment when the world price of oil begins to rise sharply. Short-run aggregate supply decreases. Does the Fed face a tradeoff in the short run? Explain why or why not. Question content area bottom Part 1 The Fed _______ face a tradeoff in the short run because _______. A. does; it will either decrease real GDP and raise the price level simultaneously or increase real GDP and lower the price level simultaneously B. does; it will either increase real GDP and raise the price level simultaneously or decrease real GDP and lower the price level simultaneously C. does not; it is impossible to decrease real GDP and lower the price level simultaneously D. does not; it will move both real GDP and the price level back to their desired levels E. does not; in the short run a change in the world price of oil has no effect on the U.S. economy