Question $51(2$ points$)$

If the Fed lowers the interest rate, what happens to the equilibrium GDP in the short run? what about in the long run?

equilibrium GDP falls temporarily in the short run, but goes back to its original level in the long run.

equilibrium GDP rises temporarily in the short run, but goes back to its original level in the long run.

equilibrium GDP falls in both the short run and long run

equilibrium GDP rises in both the short run and long run