In 2012,Ben Bernanke said that Fed policy had raised real GDP by almost 3 percent.Mr.Bernanke believes that the Fed's policy of keeping the federal funds rate ________ had resulted in an increase in ________.

Question

Quizplus · Accepted Answer

Bernanke believed that keeping the federal funds rate low had increased aggregate demand, which led to an increase in real GDP. A high federal funds rate would have the opposite effect, decreasing aggregate demand and potentially decreasing real GDP. Therefore, the best choice is C, low federal funds rate and increased aggregate demand.

In 2012,Ben Bernanke Said That Fed Policy Had Raised Real