19. If the Fed lowers the federal funds rate, eventually the AD curve shifts (ri
ID: 1119761 • Letter: 1
Question
19. If the Fed lowers the federal funds rate, eventually the AD curve shifts (rightward/leftward), i (raising/lowering) the price level. 20. If the Fed wants to fight inflation, it will (increasing/decreasing) real GDP and rate in order to (increase/decrease) aggregate demand. (lower/raise) the federal funds 21. To fight inflation, the Fed can (lower/raise) the federal funds rate by (buying/selling) securities. 22. If the Fed raises the federal funds rate, eventually the AD curve shifts (rightward/leftward) an d realG (increases/decreases)Explanation / Answer
19.
rightward,increasing, raising
the above is the answer
because lower fed rate would increase the demand which means higher growth in economy and prices will go up
20.
raise, decrease
the above is the answer
higher fed rate would decrease demand which means prices will reduce
21.
raise, selling
the above is the answer
as it would reduce moneyn supply, thus price will be lower
22.
leftward, decreases
the above is the answer