This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: How does a rise in the federal funds rate affect aggregate demand, real GDP, and the price level? ... (Read 66 times)

gonzo233

  • Hero Member
  • *****
  • Posts: 557
on: Jun 29, 2018
How does a rise in the federal funds rate affect aggregate demand, real GDP, and the price level?
 
  What will be an ideal response?

Question 2

The tendency for the values of two variables to move in a predictable and related way is known as
 
  A) a natural experiment.
  B) a normative relationshi


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

potomatos

  • Sr. Member
  • ****
  • Posts: 338
Reply #1 on: Jun 29, 2018
Answer to Question 1

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.

Answer to Question 2

D


gonzo233

  • Member
  • Posts: 557
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

bulacsom

  • Member
  • Posts: 329
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

In most climates, 8 to 10 glasses of water per day is recommended for adults. The best indicator for adequate fluid intake is frequent, clear urination.

Did you know?

Throughout history, plants containing cardiac steroids have been used as heart drugs and as poisons (e.g., in arrows used in combat), emetics, and diuretics.

Did you know?

Before a vaccine is licensed in the USA, the Food and Drug Administration (FDA) reviews it for safety and effectiveness. The CDC then reviews all studies again, as well as the American Academy of Pediatrics and the American Academy of Family Physicians. Every lot of vaccine is tested before administration to the public, and the FDA regularly inspects vaccine manufacturers' facilities.

Did you know?

Most childhood vaccines are 90–99% effective in preventing disease. Side effects are rarely serious.

Did you know?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Substrate–level phosphorylation. Substrate–level phosphorylation.
Many ideologies stem from older theories. The ideas of the philosophers are simplified. Ideologies Many ideologies stem from older theories. The ideas of the philosophers are simplified. Ideologies
The four levels of PPE according to the EPA (from left to right): Level A, Level B, Level C, and ... The four levels of PPE according to the EPA (from left to right): Level A, Level B, Level C, and ...
Marginal Supply - Demand Curve Marginal Supply - Demand Curve
Projections of global temperature depend heavily on the level of future greenhouse gas emissions Projections of global temperature depend heavily on the level of future greenhouse gas emissions
Ramey's study, children from poverty-level families IQ experiment Ramey's study, children from poverty-level families IQ experiment
Video: Glomerular filtrate rate: pressures that affect GFR, NFP & GFR and blood composition

For a complete list of videos, visit our video library