A decrease in the reserve requirement
A) decreases the money supply, which leads to decreased interest rates and a rise in investment spending.
B) increases the money supply, which leads to increased interest rates and a fall in investment spending.
C) increases the money supply, which leads to decreased interest rates and a rise in investment spending.
D) decreases the money supply, which leads to increased interest rates and a fall in investment spending.
C
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An increase in aggregate demand is shown by a
A) rightward shift of the AD curve. B) movement upward along the AD curve. C) movement downward along the AD curve. D) leftward shift of the AD curve.
When the Fed buys bonds in the open market, we can expect
A) bond prices and interest rates to fall. B) bond prices to rise and interest rates to fall. C) bond prices to fall and interest rates to rise. D) bond prices and interest rates to rise.