When the Fed decreases the money supply, the interest rate
a. rises
b. falls
c. remains unchanged
d. rises during recessions only, otherwise remains unchanged
e. falls during recessions only, otherwise remains unchanged
A
Economics
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Quantitative easing refers to expansionary monetary policy when the economy is in a liquidity trap
a. true b. false
Economics
Which of the following is correct? Whenever the monetary authority pegs the interest rate,
a. it must be ready to adjust the interest rate on demand. b. the monetary authority must exchange money for bonds on demand. c. it has control of the quantity of money. d. None of the above
Economics