List the sequence of events in the transmission from a rise in .he federal funds
ID: 1219169 • Letter: L
Question
List the sequence of events in the transmission from a rise in .he federal funds rate to a change in the inflation rate Number the items below from I through 8. Real GDP growth rate decreases. Log-term real interest rate rises. The quantity of money and supply of loanable funds decrease. Other short-term interest rates rise and the exchange rate rises. Aggregate demand decreases. Consumption expenditure, investment, and net exports decrease. Inflation rate decreases. The Fed raises the federal funds rate.Explanation / Answer
Sequence is as below:
The Fed raises the federal funds rate,
other short-term interest rates rise and the exchange rate rises.
The quantity of money and supply of loanable funds decrease
The long-term real interest rate rises.
Consumption expenditure, investment, and net exports decrease.
Aggregate demand decreases.
Eventually the real GDP growth rate
Inflation rate decrease.