Increases in policy interest rates by the FOMC are said to be anti-inflationary mainly because: (a) they make investments in interest-rate sensitive investments more attractive; (b) they are associated with rising share values among S&P 500 stocks; (c) they immediately influence the magnitude of the long-term aggregate supply curve; (d) interest rate increases tend to reduce the demand for credit, expansion of money supply growth and aggregate demand.

Increases in policy interest rates by the FOMC are said to be anti-inflationary mainly because: (a) they make investments in interest-rate sensitive investments more attractive; (b) they are associated with rising share values among S&P 500 stocks; (c) they immediately influence the magnitude of the long-term aggregate supply curve; (d) interest rate increases tend to reduce the demand for credit, expansion of money supply growth and aggregate demand.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter16: Monetary Policy

Section: Chapter Questions

Problem 3SQ

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