According to this chart, what is one result of the federal reserve sharply decreasing the discount rate?
a. deflation occurs as the economy expands.
b. deflation occurs as the economy contracts.
c. inflation occurs as the economy expands.
d. inflation occurs as the economy contracts.
i really would like some with this. i'm leaning towards it being b, but i am not sure. if someone could explain to me what they think is the right answer and why, i would be appreciative. i know deflation is when something goes down and inflation is when something goes up. how does the discount rate directly related to deflation and