The Fed Has Announced That It Plans to Lower the Rate

question 11

Multiple Choice

The Fed has announced that it plans to lower the rate of monetary growth from 10% per year to 2% per year.You would expect this announcement to directly

• A)increase money demand, shifting the LM curve up and to the left.
• B)increase money demand, shifting the LM curve down and to the right.
• C)decrease money demand, shifting the LM curve up and to the left.
• D)decrease money demand, shifting the LM curve down and to the right.