Multiple Choice
A worldwide recession reduces the amount of U.S. exports, and as a result, aggregate demand decreases. To move U.S. GDP back to potential GDP, the Fed should
A) lower the federal funds rate.
B) raise the federal funds rate.
C) increase the government's budget deficit.
D) decreasing the quantity of money of money.
Correct Answer:
Verified
Correct Answer:
Verified
Q145: Long-term interest rates fluctuate _ short-term interest
Q146: If the Fed wants to lower the
Q147: When the federal funds interest rate is
Q148: Open market purchases by the Fed<br>A) raise
Q149: Discuss how the Fed raising the federal
Q151: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB8586/.jpg" alt=" -In the above
Q152: Equilibrium in the market for bank reserves
Q153: Suppose that initially real GDP equals potential
Q154: When the Fed raises the federal funds
Q155: The Fed's actions to fight an inflation