Suppose a wave of negative animal spirits overruns the economy, and people become pessimistic about the future.

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Suppose a wave of negative “animal spirits” overruns the economy, and people become pessimistic about the future. To stabilize aggregate demand, the Fed could ________ its target for the federal funds rate or Congress could ________ taxes.

a. increase; increase

b. increase; decrease

c. decrease; increase

d. decrease; decrease

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Essentials Of Economics

ISBN: 9780357723166

10th Edition

Authors: N. Gregory Mankiw

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Question Posted: Feb 26, 2024 03:01 AM

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Suppose a wave of negative animal spirits overruns the economy, and people become pessimistic about the future.

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If a wave of negative animal spirits leads to increased pessimism in the economy the Federal Reserve ...View the full answer

Essentials Of Economics

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