When the Fed loosens monetary policy,interest rates will ________ and money supply will go ________.
A) up; stay the same
B) down; stay the same
C) go down; go up
D) go up; go down

Question

Quizplus · Accepted Answer

When the Fed loosens monetary policy, it reduces interest rates to stimulate economic growth. This is done by increasing the money supply through actions such as lowering the reserve requirements for banks. Therefore, interest rates will go down and the money supply will go up.

When the Fed Loosens Monetary Policy,interest Rates Will ________ and Money