In the short run, a decrease in the federal funds rate by the Fed
A. lowers the real interest rate, decreases investment, and shifts the AD curve rightward.
B. lowers the real interest rate, increases investment, and shifts the AD curve leftward.
C. raises the real interest rate, decreases investment, and shifts the AD curve rightward.
D. None of the above answers is correct.
Answer:D
In the short run, a decrease in the federal funds rate by the Fed
A. lowers the real interest rate, decreases investment, and shifts the AD curve rightward. B. lowers the real interest rate, increases investment, and shifts the AD curve leftward. C. raises the real interest rate, decreases investment, and shifts the AD curve rightward. D. None of the above answers is correct.