In the IS-MP analysis in the Fed model, if the Federal Reserve lowers the federal funds rate, the:
A)IS curve shifts to the left.
B)IS curve shifts to the right.
C)MP curve shifts up.
D)MP curve shifts down.

Question

Quizplus · Accepted Answer

Lowering the federal funds rate makes monetary policy more accommodative, which is represented by a downward shift of the MP curve in the IS-MP model.

In the IS-MP Analysis in the Fed Model, If the Federal