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If the Fed Wanted to Stimulate the Economy to Limit

Question 218

Multiple Choice

If the Fed wanted to stimulate the economy to limit the effects of a recessionary gap, then it should ________ the federal funds rate in order to ________ the real interest rate and thereby ________ investment.


A) lower; lower; increase
B) lower; raise; increase
C) raise; raise; decrease
D) lower; lower; decrease

Correct Answer:

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