If the Fed wants to raise the interest rate, in the short run in the money market the Fed
A)increases the quantity of money.
B)shifts the demand for money curve rightward.
C)decreases the quantity of money.
D)shifts the demand for money curve leftward.
E)directly raises the interest rate and does nothing to either the supply of money or the demand for money.

Question

Quizplus · Accepted Answer

To raise interest rates, the Fed decreases the quantity of money, which reduces the supply of money, leading to higher interest rates in the short run.

If the Fed Wants to Raise the Interest Rate, in the Short