If the Federal Reserve targets the money supply, and the money demand curve shifts to the left, then the Fed A cannot maintain the money supply target. B can maintain the money supply target, but at a lower interest rate. C can maintain the money supply target, but at a higher interest rate. D can maintain the money supply target with no change in the interest rate.

If the Federal Reserve targets the money supply, and the money demand curve shifts to the left, then the Fed

A cannot maintain the money supply target.
B can maintain the money supply target, but at a lower interest rate.
C can maintain the money supply target, but at a higher interest rate.
D can maintain the money supply target with no change in the interest rate.

 

 

Answer:

option B

Asked on February 15, 2018 in economics.
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