In the IS-LM Model When the Federal Reserve Decreases the Money

question 37

Multiple Choice

In the IS-LM model when the Federal Reserve decreases the money supply, people ______ bonds and the interest rate ______, leading to a(n) ______ in investment and income.

• A) buy; rises; increase
• B) sell; falls; decrease
• C) sell; rises; decrease
• D) buy; rises; decrease

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Definitions:

Saber-toothed Cat

An extinct group of predatory mammals known for their long, curved, saber-shaped canine teeth, prevalent during the Pleistocene epoch.

Gym Membership

A subscription-based service granting access to a facility with exercise equipment and sometimes classes for physical fitness.

North American Species

Refers to animal or plant species that are native to or predominantly found in North America.

Proposed Bill

A draft of a law presented to a legislative body for approval.