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i Chrome File Edit View History Bookmarks People Window Help 75% E, Wed 12:40 PM a C, Quiz: Chapter 12 Quiz × Principles or Macroeconomic x, R Facebook x-Q MCB-HW5 Flashcards l Quiz! × C secure https://coastdistrict,instructure.com/courses/39744/quizzes/1 22097/take/questions/2390596 Question 1 Started: Jan 24 at 12:26pm Quiz Instructions Question 4 Question 5 DashboardQuizzes Grades Syllabus People Question 4 1 pts Question 7 Question 8 If the target inflation rate is 3 percent and the actual rate of inflation increases above the target rate, Time Running: Hide Attempt due: Jan 24 at 1:26pm 46 Minutes, 16 Seconds the Fed lowers interest rates and there is an upward movement along the aggregate demand curve the Fed increases interest rates and the aggregate demand curve shifts to the left. O the Fed increases interest rates and the aggregate demand curve shifts to the right. O the Fed increases interest rates and there is a downward movement along the aggregate demand curve O the Fed increases interest rates and there is an upward movement along the aggregate demand curve. Previous Next

Solution

Answer = b)

When the Fed increases the interest rates , the demand curve shifts to the left i.e higher interest rates reduce consumer spending and investmenT and hence in turn lead to a decreasein the aggregate demand.