What you’ll learn to do: explain how monetary policy affects GDP and the price level

Expansionary and contractionary monetary policies affect interest rates, loanable funds, aggregate demand, and inevitably, GDP. In this section, you will take a look at some of the Federal Reserve’s policies over the last four decades and the impact its decisions had on the economy.

LEARNING ACTIVITIES

The learning activities for this section include:

• Reading: Monetary Policy and Aggregate Demand
• Self Check: Monetary Policy and GDP

Take time to review and reflect on each of these activities in order to improve your performance on the assessment for this section.