If the Fed Has Announced That It Plans on Increasing

question 355

Multiple Choice

If the Fed has announced that it plans on increasing the interest rate it will

• A) engage in expansionary open market operations, thereby decreasing the money supply.
• B) engage in expansionary open market operations, thereby increasing the money supply.
• C) engage in contractionary open market operations, thereby decreasing the money supply.
• D) engage in contractionary open market operations, thereby increasing the money supply.

---

Definitions:

SRMC

Short-Run Marginal Cost, which refers to the cost of producing one more unit of a good or service in the short term.

Acquired Firm

A company that has been purchased and taken over by another company.

Substitutes

are products or services that can replace or be used in place of another, catering to similar needs or functionalities, often influencing consumer choices and market dynamics.

Substitute Good

A product or service that can be used in place of another to satisfy similar needs or demands.