If the Federal Reserve decides to increase the money supply

Name: If the Federal Reserve decides to increase the money supply
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When the Federal Reserve increases the money supply, it injects more money into the economy, which leads to an increase in liquidity. This can lead to a decrease in interest rates, including the federal funds rate, which is the rate at which banks borrow and lend money to each other overnight. Therefore, choice B is correct.

If the Federal Reserve Decides to Increase the Money Supply