To Prevent the Interest Rate from Increasing, the Fed Accommodates

question 56

Multiple Choice

To prevent the interest rate from increasing, the Fed accommodates an increase in aggregate demand by which of these methods?

• A)decreasing the supply of reserves
• B)increasing the supply of reserves
• C)not changing the supply of reserves
• D)decreasing the quantity supplied of reserves

---

Definitions:

Cup

A small, open container used for drinking, typically with a handle and made of a hard material.

Metric Equivalent

A system of measurement that provides conversions between the metric system units and other measurement units.

Liters

A metric unit of volume equal to 1,000 cubic centimeters or approximately 0.26 U.S. gallons.

Coffee

A beverage made from roasted and ground beans of the Coffea plant, widely consumed globally for its stimulating effect due to caffeine content.