If the Federal Reserve Targets the Interest Rate and the Money

question 247

Multiple Choice

If the Federal Reserve targets the interest rate and the money demand curve shifts to the left,then the Fed

• A)cannot maintain the interest rate target.
• B)can maintain the interest rate target,but at a lower quantity of the money supply.
• C)can maintain the interest rate target,but at a higher quantity of the money supply.
• D)can maintain the interest rate target with no change in the money supply.