A fall in the federal funds rate leads to
A)a decrease in the quantity of money.
B)a rise in the real interest rate.
C)a decrease in investment.
D)a rise in the price level.
E)a decrease in real GDP.

Question

Quizplus · Accepted Answer

A fall in the federal funds rate typically lowers borrowing costs, encourages investment and spending, and can lead to a rise in the price level due to increased demand.

A Fall in the Federal Funds Rate Leads to