Under a k-percent rule, if the economy goes into expansion, the Fed would
A)raise the federal funds rate.
B)increase the quantity of money.
C)lower the federal funds rate.
D)lower tax rates to keep revenue constant.
E)None of the above answers are correct.

Question

Quizplus · Accepted Answer

Under a k-percent rule, the Fed would increase the money supply at a constant rate regardless of economic conditions, so none of the options directly describe this action.

Under a K-Percent Rule, If the Economy Goes into Expansion