To decrease interest rates, the Fed should increase the money supply.

Question

Quizplus · Accepted Answer

When the Fed increases the money supply, there is more money available for lending. This can lead to increased competition among lenders and a decrease in interest rates as they compete for borrowers. On the other hand, if the Fed decreases the money supply, there is less money available for lending, which can lead to higher interest rates as lenders compete for a smaller pool of borrowers.

To Decrease Interest Rates, the Fed Should Increase the Money