The Fed has decided to expand the money supply, leading to lower interest rates. As a partner in a tech start-up, you react to these lower interest rates by deciding to expand your operations and begin marketing your new artificial intelligence prototype. What impacts would this decision have on the macroeconomy? Choose one or more: A. decreasing aggregate demand B. increasing the investment part of GDP C. increase net imports D. reducing unemployment E. raising GDP

Question

Mireya

Business

3 April, 12:31

The Fed has decided to expand the money supply, leading to lower interest rates. As a partner in a tech start-up, you react to these lower interest rates by deciding to expand your operations and begin marketing your new artificial intelligence prototype. What impacts would this decision have on the macroeconomy? Choose one or more: A. decreasing aggregate demand B. increasing the investment part of GDP C. increase net imports D. reducing unemployment E. raising GDP

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Answers (1)

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Elliott Huffman · Answer 1

A. reducing unemployment

C. raising GDP

E. increasing the investment part of GDP

Explanation:

This is an expansionary monetary policy. Expansion of business results in hiring more people, which reduces unemployment. Also, business expansion results in more goods and services which raises GDP. Lastly, when business investment increases, the investment part of GDP also increases.