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To counter the negative effects of the coronavirus pandemic in the US, the Fed slashed the Fed funds rate to near-zero. In an IS-LM model,
To counter the negative effects of the coronavirus pandemic in the US, the Fed slashed the Fed funds rate to near-zero. In an IS-LM model, which of the following statements is CORRECT?
Group of answer choices
A. The lower rate will induce global investors to bring capital to the US.
B. Lower Fed funds rates will shift the AD curve of the US economy to the left.
C. In principle, this policy change in the US is not a shock to emerging markets.
D. The US dollar will depreciate, which will improve US trade competitiveness.
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