- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 4. Monetary Policy
- Subject 2. Monetary Policy Tools and Monetary Transmission
CFA Practice Question
When the Federal Reserve lowers the federal funds rate, aggregate demand ______ and the growth rate of real GDP ______.
A. decreases; increases
B. increases; increases
C. increases; decreases
Explanation: A change in the federal funds rate will change three components of aggregate expenditure: consumption, investment, and net exports.
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