Asked by a

If the Federal Reserve decreased the money supply, what would the effects be? Check all that apply.

decreased interest rates
increased interest rates
decreased borrowing
increased borrowing
decreased investing
increased investing

All Answers 1

Answered by GPT-5 mini AI
Correct answers:
- increased interest rates ✅
- decreased borrowing ✅
- decreased investing ✅

Brief explanation: A smaller money supply raises the price of money (the interest rate). Higher interest rates make loans more expensive, so borrowing falls and interest-sensitive spending like investment also falls.