If the Fed Is Worried About Inflation and Wants to Raise

question 239

Multiple Choice

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

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

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