If the Money Supply Curve Is Vertical, an Increase in Bond

question 159

Multiple Choice

If the money supply curve is vertical, an increase in bond interest rates

• A) is likely to cause banks to supply more money.
• B) is likely to cause banks to supply less money.
• C) has no effect on the money supply.
• D) is likely to cause the Federal Reserve to increase the money supply.

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Definitions:

FICA-Social Security

A U.S. government program funded by payroll taxes, providing retirement benefits, disability income, and survivor benefits.