If the Federal Reserve decided to reduce the money supply by engaging in open market bond purchases from the non-bank public, explain what will happen to the equilibrium interest rate in the U.S. In your discussion use the loanable funds theory to explain the effect on the equilibrium interest rate in an economy.

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The Answer of If the Federal Reserve decided to reduce the money supply by engaging in open market bond purchases from the non-bank public, explain what will happen to the equilibrium interest rate in the U.S. In your discussion use the loanable funds theory to explain the effect on the equilibrium interest rate in an economy.

If the Federal Reserve Decided to Reduce the Money Supply