When the Fed fights inflation, A. decrease in the supply of loanable funds raises the long-term interest rate and increases investment B. a decrease in the federal funds rate decreases aggregate demand ○ C. an open market purchase increases the federal funds rate ○ D. a decrease in bank reserves decreases the quantity of money demanded
When the Fed fights inflation, A. decrease in the supply of loanable funds raises the long-term interest rate and increases investment B. a decrease in the federal funds rate decreases aggregate demand ○ C. an open market purchase increases the federal funds rate ○ D. a decrease in bank reserves decreases the quantity of money demanded
Chapter1: Making Economics Decisions
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Transcribed Image Text:When the Fed fights inflation,
A.
decrease in the supply of loanable funds raises the long-term interest rate and increases investment
B. a decrease in the federal funds rate decreases aggregate demand
○ C. an open market purchase increases the federal funds rate
○ D. a decrease in bank reserves decreases the quantity of money demanded
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