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28 Sep 2019
The Federal Reserve is becoming more cautious about rising inflationary pressure. Assuming this, how is the Fed likely to respond to fiscal stimulus if the economy is nearing full employment?
a. Increase money supply to decrease interest rates, increase investment and increase GDP.
b. Decrease money supply to raise interest rates, increase investment and increase GDP.
c. Decrease money supply to raise interest rates, decrease investment and decrease GDP.
d. Increase money supply to increase interest rates, decrease investment and decrease GDP.
The Federal Reserve is becoming more cautious about rising inflationary pressure. Assuming this, how is the Fed likely to respond to fiscal stimulus if the economy is nearing full employment?
a. Increase money supply to decrease interest rates, increase investment and increase GDP.
b. Decrease money supply to raise interest rates, increase investment and increase GDP.
c. Decrease money supply to raise interest rates, decrease investment and decrease GDP.
d. Increase money supply to increase interest rates, decrease investment and decrease GDP.
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Anne Gillian DueroLv10
28 Sep 2019