"As Greenspan Chases Inflation, Critics Shout, 'Faster!'
"For weeks, the Fed has broadcast its intention to raise interest rates glacially." The Fed was moving slowly, according to an economist because "... the declining price of oil, economic fundamentals, incl productivity and global competition, will keep inflation in check." The Fed, recognizing that the eco was improving stated it planned to "respond to changes in economic prospects as needed to fulfill i obligation to maintain price stability." Other economists disagree with the Fed's restrained policy "mistake."
Www)nytimes, 7/1/20
By increasing the federal funds target, the Fed will reserves and _ _ the quantity of m
A) increase; increase
B) decrease; decrease
C) increase; decrease
D) decrease; increase

Question

Quizplus · Accepted Answer

Increasing the federal funds target rate typically leads to a decrease in reserves and a decrease in the quantity of money, as it makes borrowing more expensive, reducing the money supply.