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Basic Question 11 of 13
If the Fed raises the discount rate, aggregate demand ______, real GDP growth ______, and the inflation rate ______.
User Contributed Comments 2
| User | Comment |
|---|---|
| warnggg | Why does inflation rate fall? |
| cfastudypl | because when aggregate demand falls and real GDP growth decreases signalling contraction in the economy, inflation rate will fall. remember too that supply will be > than demand at this time. |
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Learning Outcome Statements
describe tools used to implement monetary policy tools and the monetary transmission mechanism, and explain the relationships between monetary policy and economic growth, inflation, interest, and exchange rates
CFA® 2025 Level I Curriculum, Volume 1, Module 4.