If the Fed Believes That Real GDP Is Above Potential

question 157

Multiple Choice

If the Fed believes that real GDP is above potential GDP, it will

• A)raise interest rates to shift the AD curve to the left and the IA line downward.
• B)raise interest rates to shift the IA line downward.
• C)raise interest rates to shift the AD curve to the left.
• D)lower interest rates to shift the IA line downward.
• E)lower interest rates to shift the AD curve to the left.

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Definitions:

Global Expansion

The process by which a company extends its operations and presence into new international markets.

Vertical Integration

The business strategy where a company owns its supply chain, from production to point of sale.

Diversification Strategy

An approach to business growth through increasing the variety of products, services, or markets served.

Different Business Areas

Various functional sectors within a company, such as finance, marketing, operations, or human resources, each responsible for specific tasks.