Macroeconomics 13th Edition by William Baumol ,Alan Blinder

Exercise 3

Newspaper reports frequently suggest that the administration (regardless of who is president) wants the Fed to lower interest rates. In view of your answer to Test Yourself Question 3, why do you think that might be the case
Reference Test Yourself Question 3,
If the Federal Reserve lowers interest rates, what will happen to the government budget deficit (Hint: What will happen to tax receipts and interest expenses ) If the government wants to offset the effects of the Fed's actions on aggregate demand, what might it do How will this action affect the deficit