At period t, the federal government imposes tariffs on China, which increases prices by 3%. This drives inflation away from the Fed's target. What should you expect to happen next in the IS-LM-MP model? Select all that apply. the output gap becomes negative unemployment decreases over the long run, the output gap goes back to zero the Fed increases interest rates

At period t, the federal government imposes tariffs on China, which increases prices by 3%. This drives inflation away from the Fed's target. What should you expect to happen next in the IS-LM-MP model? Select all that apply. the output gap becomes negative unemployment decreases over the long run, the output gap goes back to zero the Fed increases interest rates

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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