In 2012, the Federal Reserve Announced That It Would Hold

question 121

Multiple Choice

In 2012, the Federal Reserve announced that it would hold the federal fund rates near 0 percent "at least through mid-2015." This policy attempted to shift the

• A) aggregate demand curve leftward.
• B) aggregate demand curve rightward.
• C) aggregate supply curve leftward.
• D) aggregate supply curve rightward.

---

Definitions:

Compounding Interval

the frequency at which interest is added to the principal balance of a financial instrument, affecting how much interest accumulates over time.

Monthly Compounded

An interest calculation method where interest is added to the principal sum at the end of each month, accelerating the growth of the investment through more frequent compounding.

Nominal Rate

The stated interest rate on a financial product, not accounting for inflation or the compounding of interest.

Effective Rate

The actual interest rate on an investment or loan, accounting for the effect of compounding over a given period.