Other things the same, if the Fed increases the quantity of money, the supply of money curve shifts
A)leftward and the nominal interest rate increases.
B)rightward and the real interest rate increases.
C)leftward and the nominal interest rate decreases.
D)rightward and the nominal interest rate decreases.
E)leftward and the real interest rate increases.

Question

Quizplus · Accepted Answer

When the Fed increases the quantity of money, the money supply curve shifts rightward, leading to a decrease in the nominal interest rate as there is more money available in the economy.

Other Things the Same, If the Fed Increases the Quantity