53) Which of the following statements about the ripple effects of monetary policy is FALSE? Monetary policy can Select one: a. raise the federal funds rate and shift the aggregate demand curve leftward. b. raise the federal funds rate, thereby raising the real interest rate and increasing potential GDP. c. raise the federal funds rate, thereby decreasing the quantity of money, raising the real interest rate, and decreasing investment.

ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter15: Monetary Theory And Policy
Section: Chapter Questions
Problem 2.5P
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53) Which of the following statements about the
ripple effects of monetary policy is FALSE?
Monetary policy can
Select one:
a. raise the federal funds rate and shift the
aggregate demand curve leftward.
raise the federal funds rate, thereby raising the
real interest rate and increasing potential GDP.
c. raise the federal funds rate, thereby
decreasing the quantity of money, raising the
real interest rate, and decreasing investment.
Transcribed Image Text:53) Which of the following statements about the ripple effects of monetary policy is FALSE? Monetary policy can Select one: a. raise the federal funds rate and shift the aggregate demand curve leftward. raise the federal funds rate, thereby raising the real interest rate and increasing potential GDP. c. raise the federal funds rate, thereby decreasing the quantity of money, raising the real interest rate, and decreasing investment.
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