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18 November, 14:05

If the Fed lowers the federal funds rate, eventually the A. AD curve shifts rightward, increasing real GDP and raising the price level. B. AS curve shifts rightward, decreasing real GDP and raising the price level. C. AD curve shifts leftward, decreasing real GDP and raising the price level. D. AD curve shifts leftward, decreasing real GDP and lowering the price level. E. AS curve shifts leftward, decreasing real GDP and raising the price level

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  1. 18 November, 14:32
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    A. AD curve shifts rightward, increasing real GDP and raising the price level.

    Explanation:

    Federal funds rate can be defined as the interest rates bank charge other banks on loans of reserves and it is a monetary policy instrument.

    If the Fed lowers the federal funds rate, eventually the Aggregate Demand (AD) curve shifts rightward, increasing real Gross Domestic Products (GDP) and raising the price level.

    However, raising the federal funds rate, eventually causes the

    Aggregate Demand (AD) curve to shift leftward and real Gross Domestic Products (GDP) decreases.
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Home » Business » If the Fed lowers the federal funds rate, eventually the A. AD curve shifts rightward, increasing real GDP and raising the price level. B. AS curve shifts rightward, decreasing real GDP and raising the price level. C.
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