If the Federal Reserve raises or lowers interest rates too late it could result

If the federal reserve raises or lowers interest

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108) If the Federal Reserve raises or lowers interest rates too late, it could result in a ________ policythat destabilizes the economy. A) countercyclicalB) fiscalC) budgetaryD) procyclical108)Answer: DPage Ref: 908-909/526-527Learning Outcome: Macro-12: Explain how monetary policy influences interest rates, aggregate demand, realGDP and inflation. 109) Monetary policy could be procyclical if the Federal Reserve 109)Page Ref: 908-909/526-527Learning Outcome: Macro-12: Explain how monetary policy influences interest rates, aggregate demand, realGDP and inflation. 31
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110) When calculating GDP, the Bureau of Economic Analysis revises its quarterly data 110)Page Ref: 910-911/528-529Learning Outcome: Macro-12: Explain how monetary policy influences interest rates, aggregate demand, realGDP and inflation.111) Lowering the interest rate will111)Page Ref: 904/522Learning Outcome: Macro-12: Explain how monetary policy influences interest rates, aggregate demand, realGDP and inflation. 112) If money demand is extremely sensitive to changes in the interest rate, the money demand curvebecomes almost horizontal. If the Fed expands the money supply under these circumstances,then the interest rate will 112)Page Ref: 904/522Learning Outcome: Macro-12: Explain how monetary policy influences interest rates, aggregate demand, realGDP and inflation. 113) An increase in the domestic interest rate relative to other interest rates should A) increase net exports.B) increase investment spending.C) increase government spending.D) decrease consumption spending.Answer: D113)Page Ref: 905/523Learning Outcome: Macro- 12: Explain how monetary policy influences interest rates, aggregate demand, real GDP and inflation.
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