Overall, according to the Keynesian view of the economy, a ________ in the fed funds rate should lead to a(n) ________ level of output and employment in the economy.

Question

Quizplus · Accepted Answer

According to the Keynesian view, a decline in the fed funds rate, which is the interest rate at which depository institutions lend reserves to each other overnight, is generally expected to lead to lower interest rates overall. This, in turn, encourages borrowing and investment, leading to higher levels of output and employment in the economy. Therefore, none of the provided options accurately reflects the Keynesian perspective.

Overall, According to the Keynesian View of the Economy, a ________