If the Federal Reserve reduces the money supply:
A) a household would prefer to hold more wealth in an interest-bearing account than as cash.
B) a household would prefer to hold more wealth in a zero-interest account than as cash.
C) a household would prefer to hold all its wealth in an interest-bearing account.
D) foreigners would refuse to hold dollars.
E) the federal government would become insolvent.
Correct Answer:
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