Multiple Choice
Which of the following statements about the ripple effects of monetary policy is FALSE? Monetary policy can
A) raise the federal funds rate,thereby decreasing the quantity of money,raising the real interest rate,and decreasing investment.
B) lower the federal funds rate,thereby increasing the supply of loanable funds,and lowering the exchange rate.
C) lower the federal funds rate,thereby lowering the real interest rate and increasing aggregate demand.
D) raise the federal funds rate and shift the aggregate demand curve leftward.
E) raise the federal funds rate,thereby raising the real interest rate and increasing potential GDP.
Correct Answer:
Verified
Correct Answer:
Verified
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