[central_va]

Ok do you agree that only one of these three statements is true.

1. Lowering Federal funds rate stimulates GDP growth
2. Raising Federal funds rate slows GDP growth
3. Lowering or raising federal funds rate has no effect on GDP.

   If you agree pick one. If not explain please.

[Alberta's Child]

I pick #3 of all those, but any of those three can be true at different times depending on other conditions.

GDP is the sum total of all economic output in the economy. Its growth is driven by increases in population and productivity, not interest rates. If I can earn a 20% return on an asset I may have no qualms about borrowing money at 10% to buy it. If I can only earn 5% then I sure wouldn't borrow at 10%.