Author Question: What impact does the Fed's raising the interest rate have on the money supply and on the price ... (Read 45 times)

nautica902 · **on:** Jun 30, 2018

What impact does the Fed's raising the interest rate have on the money supply and on the price level?

A) An increase in interest rates raises the money supply and eventually reduces prices.
B) An increase in interest rates lowers the money supply and raises the money demand, which will neutralize price increases.
C) An increase in interest rates will increase investment spending and GDP, which will lower prices.
D) An increase in interest rates reduces the money demand which will slow the growth in prices.

Question 2

________ shows the values of a variable for different groups in the population at a certain point in time.

A) The origin
B) A time-series graph
C) A trend-line graph
D) A cross-section graph
E) A scatter plot