If the Federal Open Market Committee engages in an open market purchase, it will shift the money _____ curve to the_____,

Question

Quizplus · Accepted Answer

An open market purchase by the Federal Open Market Committee increases the money supply in the economy. As a result, it shifts the money supply curve to the right, indicating that at any given interest rate, there is now a greater supply of money. This will likely lower the equilibrium interest rate as lenders will have to offer lower interest rates to entice borrowers to borrow the additional money available.

If the Federal Open Market Committee Engages in an Open