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If the Economy Is Going into a Recession, the Federal

Question 131

Multiple Choice

If the economy is going into a recession, the Federal Reserve is likely to


A) raise interest rates to increase aggregate demand.
B) raise interest rates to decrease aggregate demand.
C) lower interest rates to increase aggregate demand.
D) lower interest rates to reduce aggregate demand.
E) do nothing because it is not clear what effect interest rates have on aggregate demand.

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