19. If the Fed lowers the federal funds rate, eventually the AD curve shifts (ri

Question

19. If the Fed lowers the federal funds rate, eventually the AD curve shifts (rightward/leftward), i (raising/lowering) the price level. 20. If the Fed wants to fight inflation, it will (increasing/decreasing) real GDP and rate in order to (increase/decrease) aggregate demand. (lower/raise) the federal funds 21. To fight inflation, the Fed can (lower/raise) the federal funds rate by (buying/selling) securities. 22. If the Fed raises the federal funds rate, eventually the AD curve shifts (rightward/leftward) an d realG (increases/decreases)

Explanation / Answer

19.

rightward,increasing, raising

the above is the answer

because lower fed rate would increase the demand which means higher growth in economy and prices will go up

20.

raise, decrease

the above is the answer

higher fed rate would decrease demand which means prices will reduce

21.

raise, selling

the above is the answer

as it would reduce moneyn supply, thus price will be lower

22.

leftward, decreases

the above is the answer

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