As Firms Expect Future Profits to Increase, They Increase Their

As firms expect future profits to increase, they increase their investment. As a result, real GDP rises above potential GDP. If the Fed followed Friedman's k- percent rule, the Fed would

A) increase the quantity of money more than usual.
B) continue allowing the quantity of money to grow at "k" percent.
C) decrease the quantity of money.
D) raise the federal funds rate.

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