All else equal, when output is low, the Fed favors a higher interest rate than it would in a high-output economy.

Name: All else equal, when output is low, the Fed favors a higher interest rate than it would in a high-output economy.
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Question

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When output is low, the Fed typically favors a lower interest rate to stimulate economic growth and increase demand. In a high-output economy, the Fed may favor a higher interest rate to prevent inflation and maintain stability.

All Else Equal, When Output Is Low, the Fed Favors