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In the RBC Model, if the Fed Responds to higher unemployment levels by decreasing the money supply a. inflation rates will fall. b. Unemployment levels

In the RBC Model, if the Fed Responds to higher unemployment levels by decreasing the money supply

a. inflation rates will fall.

b. Unemployment levels will be higher than if the Fed did nothing.

c. The model predicts unemployment levels will be the same regardless of action by the Fed following the initial shock.

d. a&c

e. a&b

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