Prior to January 2000, the demand for money increased as people anticipated Y2K problems.If the Fed had taken no action to offset this increase in money demand, then nominal interest rates would have:

Question

Quizplus · Accepted Answer

If the Fed took no action to offset the increase in money demand, the higher demand for money would lead to higher nominal interest rates as people competed to hold more money.

Prior to January 2000, the Demand for Money Increased as People