How does a rise in the federal funds rate affect aggregate demand, real GDP, and the price level?
What will be an ideal response?
A rise in the federal funds leads to investment, consumption expenditure, and net exports all decreasing, which, in turn, decreases aggregate demand. The decrease in aggregate demand then decreases real GDP and lowers the price level.
Economics
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A current account deficit exists when
(a) Government revenue exceeds spending (b) Government spending exceeds revenue (c) Imports exceed exports (d) Exports exceed imports
Economics
Which of the following is not included in the current account?
a. Imports of goods b. Exports of goods c. Unilateral transfers d. U.S. capital inflow and outflow
Economics