One News Wire article in the text is titled "Fed Cuts Key Interest Rate Half-Point to 1 Percent." Which of the following is the Fed trying to accomplish as a result of this action?
A) A leftward shift of aggregate demand.
B) A rightward shift of aggregate demand.
C) A leftward shift of aggregate supply.
D) A rightward shift of aggregate supply.

Question

Quizplus · Accepted Answer

By cutting the key interest rate, the Fed is trying to encourage borrowing and investments, which can lead to an increase in consumer and business spending. This, in turn, can shift the aggregate demand curve to the right. Therefore, the correct answer is B.

One News Wire Article in the Text Is Titled "Fed