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In the Short Run,if the Federal Reserve Reduces Interest Rates

Question 17

Multiple Choice

In the short run,if the Federal Reserve reduces interest rates,


A) firms do not change their capital stock.
B) firms buy less capital and the marginal product of capital falls.
C) firms allow their capital to fully depreciate.
D) firms accumulate more inventory.
E) firms buy more capital and the marginal product of capital falls.

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