If the Fed wants to lower the nominal interest rate in the short run, the Fed ________ the growth rate of the quantity of money.
A) raises
B) lowers
C) does not change
D) first lowers and then raises
E) None of the above answers are correct because the premise of the question is wrong since the Fed cannot affect the nominal interest rate, only the real interest rate.

Question

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The Answer of If the Fed wants to lower the nominal interest rate in the short run, the Fed ________ the growth rate of the quantity of money.
A) raises
B) lowers
C) does not change
D) first lowers and then raises
E) None of the above answers are correct because the premise of the question is wrong since the Fed cannot affect the nominal interest rate, only the real interest rate.

If the Fed Wants to Lower the Nominal Interest Rate