Typically, increasing the difference between the discount and federal funds rates causes
A) an increase in market interest rates. B) high corporate profits.
C) no change in interest rates. D) a boom in the economy.
A
You might also like to view...
In the interest-rate-based transmission mechanism, a decrease in the money supply will
A) reduce investment, shift the aggregate demand function inward, and lower real Gross Domestic Product (GDP). B) reduce the rate of interest and the level of investment. C) increase the price level. D) shift the aggregate supply function inward and increase real Gross Domestic Product (GDP).
The effects on the economy of a prolonged decrease in investment are ________ if ________ occurs
A) more pronounced; consumers adjust permanent income downwards B) less pronounced; consumers do not adjust permanent income upwards C) more pronounced; consumers adjust permanent income upwards D) less pronounced; consumers adjust permanent income downwards