In the short run, a decrease in the federal funds rate by the Fed
A) lowers the real interest rate, increases investment, and shifts the AD curve leftward.
B) raises the real interest rate, decreases investment, and shifts the AD curve rightward.
C) lowers the real interest rate, decreases investment, and shifts the AD curve rightward.
D) None of the above answers is correct.
Correct Answer:
Verified
Q91: Q92: Q93: When the Fed lowers the federal funds Q94: In the short run, a cut in Q95: Suppose that the market for reserves is Q97: If the Fed increases the quantity of Q98: When the Federal Reserve increases the Federal Q99: The Fed lowers the federal funds rate. Q100: In the short run, an increase in Q101: The Federal Reserve fights inflation via open
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