If every one-point change in the federal funds rate alters aggregate demand by $200 billion, the AD shifted to the right by a billion. This is further explained below.
<h3>What is the interest rate?</h3>
Generally, the interest rate is simply defined as the part of a loan levied to the borrower as interest, usually represented as a yearly percentage of the loan outstanding
In conclusion, If a one-point increase in the federal funds rate changes aggregates demand by $200 billion, the AD shifts to the right by a billion.
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