Suppose the Federal Reserve raises interest rates. Which of the following predicts the most likely results?
A. The money supply will decrease, meaning that banks will give fewer loans and prices for goods and services will fall.
B. The money supply will decrease, meaning that more people will buy goods and services and prices will rise.
C. The money supply will increase, meaning that banks will give more loans and more businesses can open and hire workers.
D. The money supply will increase, meaning that prices will rise and businesses will not hire many workers
I think that the answer is D.
1 answer
I think you are right.