_____________________The Federal Reserve, the central bank of the United States, has been cutting the interest rate in order to stimulate the recessionary economy. Interest cuts by the Federal Reserve are supposed to: FILL IN THE BLANK A). increase investment spending and thus increase GDP via the multiplier. B.) increase cash holding by the general public thus lowering their dependence on credit. C). increase government spending on the economic infrastructure and thus increase GDP through the multiplier process. D). lower the savings rate in the economy and stop leakages. _ E) all of the above
_____________________The Federal Reserve, the central bank of the United States, has been cutting the interest rate in order to stimulate the recessionary economy. Interest cuts by the Federal Reserve are supposed to: FILL IN THE BLANK A). increase investment spending and thus increase GDP via the multiplier. B.) increase cash holding by the general public thus lowering their dependence on credit. C). increase government spending on the economic infrastructure and thus increase GDP through the multiplier process. D). lower the savings rate in the economy and stop leakages. _ E) all of the above
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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30______________________The Federal Reserve, the central bank of the United States, has been cutting the
interest rate in order to stimulate the recessionary economy. Interest cuts by the Federal Reserve are supposed to: FILL IN THE BLANK
A). increase investment spending and thus increase GDP via the multiplier.
B.) increase cash holding by the general public thus lowering their dependence on credit.
C). increase government spending on the economic infrastructure and thus increase GDP through the multiplier
process.
D). lower the savings rate in the economy and stop leakages. _
E) all of the above
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