Prior to January 2000, the demand for money increased as people anticipated Y2K problems.To offset this increase in money demand, the Fed would have had to ______ the money supply, which would have put ______ pressure on nominal interest rates.

Question

Quizplus · Accepted Answer

To offset an increase in money demand, the Fed would increase the money supply, which would put downward pressure on nominal interest rates.

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