Suppose that in Free Zone (the cycle presented in the problem 6), the aggregate supply curve is short plasterboard CAFOs and potential GDP increases to 350 000 million.
a. Free zone would happen if the central bank lowered the federal funds rate and buy securities on the open market?
b. Recommends that the bank central raise or lower the federal funds rate? For what?
c. Recommends that the central bank will raise or lower the federal funds rate? For what?