-Using the data in the above table,if potential GDP for this economy is $25 billion,then in order to restore full employment,the federal funds rate can be
A)lowered so that government expenditure on goods and services increase.
B)raised so that consumption expenditure,investment,and net exports increase.
C)lowered so that consumption expenditure,investment,and net exports increase.
D)raised so that net exports increase.
E)lowered so that consumption expenditure and investment increase,though net exports decrease.

Question

-Using the data in the above table,if potential GDP for this economy is $25 billion,then in order to restore full employment,the federal funds rate can be
A)lowered so that government expenditure on goods and services increase. 
B)raised so that consumption expenditure,investment,and net exports increase. 
C)lowered so that consumption expenditure,investment,and net exports increase. 
D)raised so that net exports increase. 
E)lowered so that consumption expenditure and investment increase,though net exports decrease.

Quizplus · Accepted Answer

Lowering the federal funds rate typically stimulates economic activity by making borrowing cheaper, which can increase consumption expenditure, investment, and net exports, helping to restore full employment.

-Using the Data in the Above Table,if Potential GDP for This