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If the Federal Reserve Lowers the Discount Rate,ceteris Paribus,the Equilibrium

Question 42

Multiple Choice

If the Federal Reserve lowers the discount rate,ceteris paribus,the equilibrium levels of funds lent will __________ and the equilibrium level of real interest rates will ___________.


A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) reverse direction from their previous trends

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