A fall in the federal funds rate leads to
A) a decrease in the quantity of money.
B) a rise in the real interest rate.
C) a decrease in investment.
D) a rise in the price level.
E) a decrease in real GDP.
D
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The fraction of additional income spent on imports is called the marginal propensity to import
Indicate whether the statement is true or false
What is the largest possible loss that is consistent with a firm producing in a perfectly competitive market in long-run competitive equilibrium?
a. An amount equal to (price less average variable cost). b. An amount equal to total variable. c. Zero. d. An amount equal to total fixed cost.
The MPC shows the relationship between:
a. interest rates and investment. b. disposable income and consumer spending. c. saving and investing. d. inflation and unemployment
Drug prohibition is likely to increase drug-industry revenue because the demand for drugs is inelastic.
a. true b. false