In the Short Run, When the Fed Increases the Quantity

question 114

Multiple Choice

In the short run, when the Fed increases the quantity of money

• A) bond prices rise and the interest rate falls.
• B) bond prices fall and the interest rate rises.
• C) the demand for money increases.
• D) the supply of money curve shifts leftward.

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Definitions:

Workforce

The pool of individuals in a country or company eligible for and engaged in employment, including both employees and those seeking employment.

Discretionary Income

The amount of an individual's income left for spending, investing, or saving after taxes and personal necessities have been paid.

Fiscal Policy

Government policies related to taxation and spending that are used to influence a country's economic conditions.

Private Spending

Expenditures made by individuals, households, and businesses in the private sector, excluding government spending.