When the Fed cuts the Federal funds rate, real GDP growth ________ and the inflation rate ________.

Name: When the Fed cuts the Federal funds rate, real GDP growth ________ and the inflation rate ________.
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Question

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When the Federal Reserve cuts the Federal funds rate, it makes borrowing cheaper. This typically leads to increased spending and investment, which boosts real GDP growth. Additionally, the increased demand can lead to higher prices, thus increasing the inflation rate.

When the Fed Cuts the Federal Funds Rate, Real GDP