Asked by
Easton Warner
on Nov 11, 2024
Verified
If the Fed purchases U.S.government securities,gross domestic product:
A) increases because the resulting increase in the interest rate leads to a decrease in investment.
B) increases because the resulting decrease in the interest rate leads to an increase in investment.
C) decreases because the resulting increase in the interest rate leads to a decrease in investment.
D) decreases because the resulting increase in the interest rate leads to an increase in investment.
E) decreases because the resulting decrease in the interest rate leads to an increase in investment.
Gross Domestic Product
The monetary value of all finished goods and services made within a country during a specific period.
Interest Rate
The percentage charged on a loan or paid on savings over a certain period of time, reflecting the cost of borrowing or the return on savings.
Investment
An asset or item acquired with the goal of generating income or appreciation in value.
- Analyze the ramifications of monetary policy actions implemented by the Federal Reserve on the economy's health.
- Distinguish the impacts of fiscal policies on investment, GDP, and the interest rate.
Verified Answer
JC
Learning Objectives
- Analyze the ramifications of monetary policy actions implemented by the Federal Reserve on the economy's health.
- Distinguish the impacts of fiscal policies on investment, GDP, and the interest rate.