Suppose the Federal Reserve decides to increase the money supply. Which of the following predicts the most likely results?

Interest rates will rise, meaning that banks will give fewer loans and prices for goods and services will fall.

Interest rates will fall, meaning that banks will give more loans and more businesses can open and hire workers.

Interest rates will fall, meaning that prices will rise and businesses will not hire many workers.

Interest rates will rise, meaning that more people will buy goods and services and prices will rise.

Question

Suppose the Federal Reserve decides to increase the money supply. Which of the following predicts the most likely results?

 Interest rates will rise, meaning that banks will give fewer loans and prices for goods and services will fall.

 Interest rates will fall, meaning that banks will give more loans and more businesses can open and hire workers.

 Interest rates will fall, meaning that prices will rise and businesses will not hire many workers.

 Interest rates will rise, meaning that more people will buy goods and services and prices will rise.

amistre64 · Answer

how does the fed increase the money supply?

anonymous · Answer

@clayton4christ

anonymous · Answer

I'd say D.

anonymous · Answer

D? yeah lol you type faster than me XD

anonymous · Answer

Thank so much! im done with my test!

anonymous · Answer

Awesome! Tell me how ya do:)

anonymous · Answer

ok stick around and i will tell you :D

anonymous · Answer

Just message me cause I got to go. Sorry :/ I might get back on later tonight