If the Economy Is at Potential Output and the Fed

question 140

True/False

If the economy is at potential output and the Fed increases the money supply, interest rates will likely increase in the short run.

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Definitions:

Authority

The power or right to give orders, make decisions, and enforce obedience.

DEA

Short for Drug Enforcement Administration, a United States federal agency responsible for combating drug smuggling and use within the country.

Enforcement Power

The authority given to entities to ensure compliance with laws, regulations, or standards.

Narcotics

Drugs that induce sleep or numbness and have the potential for addiction or abuse, often used for pain relief.