If the Reserve Bank Is Worried About Inflation and Wants

question 90

Multiple Choice

If the Reserve Bank is worried about inflation and wants to raise the interest rate, in the short run it can

• A) increase the quantity of money.
• B) decrease the demand for money.
• C) decrease the quantity of money.
• D) increase the demand for money.
• E) directly raise the interest rate without affecting either the demand for money or the supply of money.

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