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NYC NYC
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8 years ago
If the federal government is reducing net taxes to stimulate the economy at the same time the Fed is buying bonds in the open market, the effectiveness of the expansionary fiscal policy will be:
A) increased, because the Fed's actions will result in lower interest rates and a reduction in the crowding-out effect.
B) increased, because the Fed's actions will result in lower interest rates and an increase in the crowding-out effect.
C) reduced, because the Fed's actions will result in lower interest rates and an increase in the crowding-out effect.
D) reduced, because the Fed's actions will result in higher interest rates and an increase in the crowding-out effect.
Textbook 
Principles of Macroeconomics

Principles of Macroeconomics


Edition: 11th
Authors:
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JesslynJesslyn
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NYC Author
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#2
8 years ago
Thanks for answering Slight Smile
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