The Federal Reserve slows the growth in the supply of money and credit.Interest rates will likely ________,which is an example of ________ policy.

Question

Quizplus · Accepted Answer

The Federal Reserve slowing the growth in the supply of money and credit is an example of monetary policy. When the supply of money and credit is reduced, it leads to higher interest rates, as there is less money available for borrowing. This is because lower supply leads to higher demand, which in turn leads to higher prices (in this case, higher interest rates). Therefore, the correct choice is A, where the interest rates will likely rise due to the monetary policy of the Federal Reserve.

The Federal Reserve Slows the Growth in the Supply of Money