The Fed controls GDP directly through government spending. indirectly through the foreign exchange market. indirectly through...

Question

Question

The Fed controls GDP

directly through government spending.

indirectly through the foreign exchange market.

indirectly through the money supply.

directly through price indexing.

indirectly through tax collections.

business economics

Answer 1

Answer #1

Correct answer is 3rd option.

The Fed controls GDP indirectly through the money supply

The Fed controls the money supply by changing interest rates which affects the aggregate demand in the market.

Answer 2

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