To answer the next question, use the information in the table below which illustrates the multiplier process resulting from an autonomous increase in investment by $5. Change in IncomeChange in ConsumptionChange in SavingsAssumed increase in investment$5.00 $1.25Second round $2.81 All other rounds 8.44 Totals   5.00The change in income in round two will be

If real GDP exceeds potential GDP, to move the economy to potential GDP the Fed

A) raises the federal funds rate to increase potential GDP but not real GDP. B) lowers the federal funds rate to decrease real GDP but not potential GDP. C) raises the federal funds rate to decrease real GDP but not potential GDP. D) lowers the federal funds rate to increase potential GDP but not real GDP. E) raises the federal funds rate to decrease both real GDP and potential GDP.

An increase in the sensitivity of private spending (consumption, investment, and net exports) to changes in the interest rate ________ the government purchases multiplier

A) may increase or may decrease B) will not change C) will increase D) will decrease