When the Fed ________ the money stock,the money supply curve shifts to the ________ and the interest rate ________,everything else held constant.

Question

Quizplus · Accepted Answer

When the Fed increases the money stock, the money supply curve shifts to the right, indicating an increase in the money supply. As a result, the interest rate falls, everything else held constant. This is because there is more money available in the economy, which reduces the demand for borrowing and lending and reduces the cost of borrowing (i.e., interest rates).

When the Fed ________ the Money Stock,the Money Supply Curve