In the Short-Run, If the Federal Reserve Decreases Interest Rates

question 97

Multiple Choice

In the short-run, if the Federal Reserve decreases interest rates, then consumption and investment ________, planned aggregate expenditure ________, and short-run equilibrium output ________.

• A)increase; increases; increases
• B)increase; increases; decreases
• C)increase; decreases; decreases
• D)decrease; decreases; decreases

Understand the distinctions and applications of various economic statements (normative, positive).

Recognize and explain the fallacies in economic reasoning, such as the fallacy of composition and association as causation.

Grasp the scientific method's application in economics, including hypotheses and predictions.

Understand the role of secondary effects and unintended consequences in economic policies.

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Definitions:

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