Use Figure 5.1 in the text to analyze the effect of the following on the level of
Question:
Use Figure 5.1 in the text to analyze the effect of the following on the level of real interest rates:
a. Businesses become more pessimistic about future demand for their products and decide to reduce their capital spending.
b. Households are induced to save more because of increased uncertainty about their future Social Security benefits.
c. The Federal Reserve Board undertakes open-market purchases of U.S. Treasury securities in order to increase the supply of money.
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