Because investment,consumption expenditure,and net exports are interest-sensitive components of expenditure,a ________ in the federal funds rate brings ________ in ________.
A)fall;a decrease;aggregate demand
B)fall;an increase;aggregate demand
C)rise;an increase;aggregate supply
D)rise;an increase;aggregate demand
E)fall;a decrease;aggregate supply

Question

Quizplus · Accepted Answer

A fall in the federal funds rate typically lowers borrowing costs, encouraging investment and consumption, which increases aggregate demand.

Because Investment,consumption Expenditure,and Net Exports Are Interest-Sensitive Components of Expenditure,a