If the Fed lowers the federal funds rate, the first effect in an AS/AD figure is a __________shift of the__________ curve.

Question

Quizplus · Accepted Answer

If the Fed lowers the federal funds rate, it becomes cheaper for banks to borrow money, which increases the money supply and lowers interest rates for consumers and businesses. This leads to an increase in spending and investment, causing the aggregate demand (AD) curve to shift to the right.

If the Fed Lowers the Federal Funds Rate, the First