Author Question: Economies cannot function without money. Indicate whether the statement is true or ... (Read 61 times)

karlynnae · **on:** Jun 29, 2018

Economies cannot function without money.

Indicate whether the statement is true or false

Question 2

In September of 2007, the Federal Reserve Board Open Market Committee voted to lower interest rates for the first time that year. Explain how lower interest rates affect the aggregate demand curve.

What will be an ideal response?

irishcancer18 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

FALSE

Answer to Question 2

Reducing the interest rate lowers the cost of borrowing to firms and to households. As a result, both firms and households will increase expenditures. This increase in expenditures will shift the aggregate demand curve to the right.