The Fed raises the federal funds rate. Which of the following changes takes the longest time before it occurs?
A) Quantity of money decreases.
B) Exchange rate rises.
C) Supply of loanable funds decreases.
D) Aggregate demand decreases.
E) Short-term interest rates rise.
Question 2
When the U.S. government launched a massive rescue plan in response to the 2008-2009 financial crisis, one of the main actions taken was to ________ because the desire was to lessen the severity of the recession by ________.
A) increase the supply of loanable funds; limiting the decrease in investment
B) decrease the supply of loanable funds; limiting the decrease in investment
C) decrease the supply of loanable funds; encouraging decrease in investment
D) increase the supply of loanable funds; encouraging decrease in investment
E) increase the demand of loanable funds; encouraging decrease in investment
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