About future income and lower their autonomous consumption

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Reference no: EM13839507

Suppose that consumers become more pessimistic about future income and lower their autonomous consumption. With no government response, this would ___________ short-run output. If the Fed wanted to counteract this change, it should __________ the Federal Funds rate.

1. Increase, increase

2. Increase, decrease

3. Decrease, decrease

4. Decrease, increase

5. Not effect, not change

Reference no: EM13839507

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