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Lowering the nominal interest rate suppose the fed

Question: Lowering the nominal interest rate: Suppose the Fed announces today that it is lowering the fed funds rate by 50 "basis points" (that is, by half a percentage point). Using the IS-MP diagram, explain what happens to economic activity in the short run. What is the economics underlying the response in the economy?

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Microeconomics: Lowering the nominal interest rate suppose the fed

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