Suppose that several European countries enter a recession, thereby decreasing U.S. exports. To move U.S. GDP back to potential GDP, the Fed should

Name: Suppose that several European countries enter a recession, thereby decreasing U.S. exports. To move U.S. GDP back to potential GDP, the Fed should
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Question

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Lowering the federal funds rate would decrease interest rates, encouraging borrowing and spending, which can help move the U.S. GDP back to its potential level by stimulating economic activity.

Suppose That Several European Countries Enter a Recession, Thereby Decreasing