When the Fed Unexpectedly Increases the Money Supply, It Will

question 130

Multiple Choice

When the Fed unexpectedly increases the money supply, it will cause an increase in aggregate demand because

• A) lower interest rates will stimulate business investment and consumer purchases.
• B) real interest rates will fall, causing the dollar to depreciate and net exports to rise.
• C) lower interest rates will cause the value of assets (for example, stocks) to rise.
• D) all of the above are correct.

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Definitions:

Voter Preference

The inclination or favoritism of voters towards particular candidates, parties, or policies in an election.

T Test

A statistical test used to compare the means of two groups to determine if they are significantly different from each other.

Mann-Whitney U Test

is a non-parametric statistical test used to compare differences between two independent groups when the dependent variable is ordinal or continuous but not normally distributed.

Chi-Square Test

A statistical test used to determine the significance of an observed association between categorical variables.