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Assume the Fed is concerned with a possible recession so it wants to lower the interest r

 Assume the Fed is concerned with a possible recession so it wants to lower the interest rate. How does the Fed lower the interest rate in the short run?

 

6) What is the effect of lowering the interest rate on net exports? Explain your answer.

 

7) List and briefly explain the steps in how monetary policy affects real GDP in the AS/AD model. Tell what is the impact when the Fed eases monetary policy to fight a recession.

Dec 08 2019 Read more Less More

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