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If the economy is running too hot (i.e., actual output is above potential output), the Fed should ________ the policy interest rate or else inflation

If the economy is running too hot (i.e., actual output is above potential output), the Fed should ________ the policy interest rate or else inflation will _______ expectations.

a) increase; increase above

b) increase; fall below

c) decrease; increase above

d) decrease; fall below

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