Ask Question
22 December, 02:49

When the Fed increases the money supply,

A. the interest rate rises and this stimulates consumption spending.

B. people spend less because they have more money.

C. the interest rate falls and this stimulates investment spending.

D. the interest rate rises and this stimulates investment spending.

+5
Answers (1)
  1. 22 December, 03:12
    0
    D. the interest rate rises and this stimulates investment spending.

    Explanation:

    When the Fed increases the money supply the interest rate rises and this stimulates consumption spending. This is because when interest rate rise, people tend to invest rate and consume more.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “When the Fed increases the money supply, A. the interest rate rises and this stimulates consumption spending. B. people spend less because ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers