Federal open market committee

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The Federal Open Market Committee changed the federal funds rate in December 2016. Which of the following best describes the probable reasons for this change?
a. Aggregate supply is increasing, and the falling unemployment rate indicates that output is approaching potential. The federal funds rate was left unchanged to allow aggregate supply to continue increasing, until output reaches potential.
b. Aggregate supply is increasing, and the falling unemployment rate indicates that output has exceeded or soon will exceed potential. The federal funds rate was left unchanged to allow aggregate supply to continue increasing, until output reaches potential.
c. Aggregate demand is increasing, and the falling unemployment rate indicates that output is approaching potential. The federal funds rate was increased to raise the growth in aggregate demand, to bring output to potential more quickly.
d. Aggregate demand is increasing, and the falling unemployment rate indicates that output has exceeded or soon will exceed potential. The federal funds rate was increased to slow the growth in aggregate demand, to hold output near potential.

Reference no: EM131449171

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