Between 2000 and 2003 the federal government reduced the key (most important) interest rate for the economy to 1%; according to economic theory what effects did this action probably have on the economy?

Select one:

a.

It helped reduce the unemployment rate and created more inflation

b.

It helped reduce the unemployment rate and reduced inflation

c.

It caused the unemployment rate to rise, but helped control inflation

d.

It caused the unemployment rate to rise and created more inflation

e.

Government policy has no effect on the economy

Answer rating: 100% (QA)

The federal government reduced the key most important interest rate for the economy to 1 according t... View the full answer