Which of the following leads to an increase in the interest rate?

Question

Quizplus · Accepted Answer

When the Fed sells government securities, it decreases the amount of money in circulation. This reduction in the money supply leads to an increase in the interest rate. The other options mentioned, such as a decrease in the price level or nominal aggregate output, may not directly affect the interest rate. And a decrease in the discount rate actually leads to a decrease in interest rates.

Which of the Following Leads to an Increase in the Interest