A decrease in the federal funds rate OA lowers other sort -term interest rate, r

Question

A decrease in the federal funds rate OA lowers other sort -term interest rate, raises the real interest rate, and increases aggregate demand. OB. decreases the supply of loanable funds, raises the real interest rate, and decreases aggregate demand. OC. increases other short -term interest rates, decreases investment, and decreases aggregate demand. OD. decreases the demand for loanable funds, lowers the real interest rate, and decreases aggregate demand. OE. lowers the exchange rate, increases the supply of loanable funds, and increases aggregate demand.

Explanation / Answer

E.Lowers the exchange rate, increases the supply of loanable funds and increases aggregate demand.

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