when the fed sells , it is employing monetary policy. this causes interest rates to rise, which decreases activity. consequently, decreases in the short run, causing a __ in the real gdp and – .

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maciekfinfand2023 maciekfinfand2023

03-12-2021
Business

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when the fed sells , it is employing monetary policy. this causes interest rates to rise, which decreases activity. consequently, decreases in the short run, causing a __ in the real gdp and – .

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topeadeniran2 topeadeniran2 · Answer 1 · 2021-12-06T17:38:03+01:00

It should be noted that in a situation where the Fed sells securities, it's employing the contractionary fiscal policy.

A contractionary fiscal policy is used when the gross domestic product is growing too fast. It uses to curb inflation.

Contractionary monetary policy leads to a decrease in the money supply in the economy and causes interest rates to rise. This decreases expenditure activities.

Consequently, demand decreases in the short run causing a reduction in the real GDP.

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when the fed sells __________ , it is employing __________ monetary policy. this causes interest rates to rise, which decreases __________ activity. consequently, __________ decreases in the short run, causing a __________ in the real gdp and – .

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when the fed sells , it is employing monetary policy. this causes interest rates to rise, which decreases activity. consequently, decreases in the short run, causing a __ in the real gdp and – .