Question

Choose the best word or phrase from each drop-down menu.
The Federal Reserve increases the money supply when it is trying to encourage the economy to
.

Consumers are more willing to spend using credit when the money supply is higher because interest rates are
.

One major positive effect of increasing the money supply is
in the unemployment rate.

Answer 1

The Federal Reserve increases the money supply when it is trying to encourage the economy to expand (stimulate growth).

Consumers are more willing to spend using credit when the money supply is higher because interest rates are lower.

One major positive effect of increasing the money supply is a decrease in the unemployment rate.