1. a) When the Fed lowers interest rates, what is the impact on the value of...

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Economics

1. a) When the Fed lowers interest rates, what is the impact onthe value of the dollar, exports, imports, consumption, investment,and the AD curve?
b) When the Fed raises interest rates, what is the impact on thevalue of the dollar, exports, imports, consumption, investment, andthe AD curve?
2.Explain the differences between classical economists andKeynesians in regards to monetary policy during a recession.
3. Explain efficiency-wage theory.

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1 When Fed lowers interest rates it means that bank provide loan at lower rate of interest It causes more and more people take loan or credit from the bank for their consumption and investment purposes to run and set up business The value of dollar weaken because the rate of return of US assets and securities reduces due to which less people want to invest in US The export falls because US dollar become weaker as compare to other countries the import rise See Answer

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