An unanticipated shift to a more expansionary monetary policy by the Fed will
a. increase real interest rates and, thereby, reduce investment, current consumption, and aggregate demand.
b. reduce real interest rates, leading to an appreciation of the dollar and an expansion in net exports and aggregate demand.
c. increase real interest rates, leading to higher asset prices that will stimulate aggregate demand.
d. reduce real interest rates and, thereby, stimulate investment, current consumption, and aggregate demand.
D
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When two variables repeatedly change at the same time, there must be a causal relationship between them
a. True b. False Indicate whether the statement is true or false
Which of the following demonstrates the law of supply? a. When leather became more expensive, belt producers decreased their supply of belts
b. When car production technology improved, car producers increased their supply of cars. c. When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. d. When lemon prices rose, lemon growers increased their quantity supplied of lemons.