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Inessa05 [86]
3 years ago
10

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 – .
Business
1 answer:
kicyunya [14]3 years ago
6 0

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

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.

Read related link on:

brainly.com/question/25766122

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