When the Fed Unexpectedly Decreases the Money Supply

question 64

Multiple Choice

When the Fed unexpectedly decreases the money supply,

• A) real interest rates will rise and the foreign exchange value of the dollar will appreciate.
• B) real interest rates will rise and the foreign exchange value of the dollar will depreciate.
• C) real interest rates will fall and the foreign exchange value of the dollar will appreciate.
• D) real interest rates will fall and the foreign exchange value of the dollar will depreciate.

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Definitions:

Ontario

A province in Canada known for its natural beauty, including lakes and forests, and as the home of Canada's largest city, Toronto.

Innocent

Free from guilt, wrongdoing, or blame in a specific situation or context.

Sleepwalking

A sleep disorder that causes people to get up and walk around or perform other complex behaviors while still mostly asleep.

Convicted

Found guilty of a criminal offense by a court of law.