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The output gap has gone from approximately zero to 2%, and inflation has risen to 5%, above the target of 2%. Under these circumstances, the
The output gap has gone from approximately zero to 2%, and inflation has risen to 5%, above the target of 2%. Under these circumstances, the Federal Open Market Committee (FOMC) is likely to _____ the interest rate on overnight reverse repurchase agreements and _____ the interest rate the Fed pays on reserves. Question 6 options: a) raise; raise b) lower; lower c) raise; lower d) lower; raise
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