When the Fed Unexpectedly Decreases the Money Supply

question 35

Multiple Choice

When the Fed unexpectedly decreases the money supply,

• A) real interest rates will tend to decline.
• B) the exchange rate value of the dollar will tend to appreciate.
• C) aggregate demand will tend to increase.
• D) there is generally no impact on the economy.

---

Definitions:

Pathogen-Associated Molecules

Molecular structures that are recognized by the cells of the innate immune system, indicating the presence of microbial pathogens.

Cytokines

Small proteins released by cells that have a specific effect on the interactions between cells, on communications between cells or on the behavior of cells.

Cell Walls

Rigid or semi-rigid structures that surround the cell membrane of some cells, providing structural support and protection.

T Cytotoxic Cell

A type of T lymphocyte that kills cancer cells, cells that are infected (particularly with viruses), or cells that are damaged in other ways.