Rise in interest rates due to decrease in the money supply

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1. A rise in interest rates due to a decrease in the money supply will _____ aggregate demand.

A. not change

B. increase

C. reduce

D. cause random fluctuations in

2. A contractionary monetary policy is appropriate during a recession.

True

False

3. A sale of Treasury bills by the Federal Reserve _____ interest rates and _____ the money supply.

A. lowers; increases

B. raises; reduces

C. raises; increases

D. lowers; reduces

Reference no: EM131391734

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