Suppose that the Fed is concerned that a decline in investment spending by businesses is likely to take place. In order to offset the effects of the decline in investment spending, the Fed increases the nominal money supply. If the decline in investment spending does not take place, what will be the impact of the Fed's action on the economy in the short run? What will be the impact of the Fed's action in the long run?

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The Answer of Suppose that the Fed is concerned that a decline in investment spending by businesses is likely to take place. In order to offset the effects of the decline in investment spending, the Fed increases the nominal money supply. If the decline in investment spending does not take place, what will be the impact of the Fed's action on the economy in the short run? What will be the impact of the Fed's action in the long run?

Suppose That the Fed Is Concerned That a Decline in Investment