The Fed lowered interest rates in 2001 and 2002. This implies, other things the same, that the Fed
A)increased the money supply because it was concerned about inflation.
B)decreased the increased the money supply because it was concerned about inflation.
C)decreased the money supply because it was concerned about inflation.
D)increased the money supply because it was concerned about unemployment.

Question

Quizplus · Accepted Answer

Lowering interest rates typically involves increasing the money supply, which is often done to stimulate economic activity and reduce unemployment, not because of concerns about inflation.

The Fed Lowered Interest Rates in 2001 and 2002