If the Fed Wants to Lower the Nominal Interest Rate

question 261

Multiple Choice

If the Fed wants to lower the nominal interest rate in the short run, the Fed ________ the growth rate of the quantity of money.

• A) raises
• B) lowers
• C) does not change
• D) first lowers and then raises
• E) None of the above answers are correct because the premise of the question is wrong since the Fed cannot affect the nominal interest rate, only the real interest rate.

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Definitions:

Deep Sorrow

An intense feeling of sadness or grief, often resulting from a significant loss or disappointment.

Bereavement

The period of mourning and grief following the death of a loved one, characterized by a variety of emotional, cognitive, and physical responses.

Ritualistic Expression

Forms of habitual or ceremonial actions that are performed in a specific way to convey meanings, beliefs, or traditions.

Bereavement

The period of mourning and grief following the death of a loved one.