When the Fed randomly increases the money supply at a lower rate than what is expected by the public,:
A) the demand for money will accelerate.
B) interest rates go up.
C) investment goes down.
D) the public will immediately lower their inflation expectations.

Question

Quizplus · Accepted Answer

When the Fed increases the money supply at a lower rate than what is expected by the public, it will reduce the available money circulation in the economy, causing interest rates to go up.

When the Fed Randomly Increases the Money Supply at a Lower