Which of the Following Statements About the Ripple Effects of Monetary

question 37

Multiple Choice

Which of the following statements about the ripple effects of monetary policy is FALSE? Monetary policy can

• A)raise the federal funds rate and shift the aggregate demand curve leftward.
• B)raise the federal funds rate, thereby raising the real interest rate and increasing potential GDP.
• C)raise the federal funds rate, thereby decreasing the quantity of money, raising the real interest rate, and decreasing investment.
• D)lower the federal funds rate, thereby lowering the real interest rate and increasing aggregate demand.
• E)lower the federal funds rate, thereby increasing the supply of loanable funds, and lowering the exchange rate.

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Definitions:

Narrow Ocean

A relatively thin and elongated body of oceanic water situated between more substantial land masses.

Narrow Ocean

Refers specifically to the relatively thinner and smaller expanses of ocean, often found between landmasses.

Narrow Sea

A relatively small and elongated body of seawater that lies between two landmasses, often acting as a natural border.

Volcanic Islands

Islands formed by volcanic processes above the sea level, often at hot spots or oceanic plate boundaries.