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The Federal Reserve and Congress are trying to conduct various actions to address the current recession. The Federal Reserve does so by buying bonds to
The Federal Reserve and Congress are trying to conduct various actions to address the current recession. The Federal Reserve does so by buying bonds to increase the money supply and lowering the federal funds rate. Congress attempts to combat the recession by increasing funding for employment programs and social assistance. The total effect of these actions will result in an in the real interest rate and a shift in the output gap.
increase; negative
decrease; negative
increase; positive
decrease; positive
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