Question

Using the liquidity-preference model, when the Federal Reserve decreases the money supply, a. the equilibrium interest rate increases. b. the aggregate-demand curve shifts to the right. c. the quantity of goods and services demanded is unchanged for a given price level. d. the short-run aggregate-supply curve shifts to the left.

Answer 1

A

Step-by-step explanation:

When the fed increases money supply it is known as expansionary monetary policy. the excess of supply over demand leads to a fall interest rate