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

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Reina

Social Studies

29 June, 23:09

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

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Rowan Hampton · Answer 1

Answer: If the Federal Reserve decreases the money supply, it would result in increased interest rates, decreased borrowing, and decreased investing.

Explanation:Conversely, if the Fed wants to decrease the money supply, it sells bonds from its account, thus taking in cash and removing money from the economic system. Adjusting the federal funds rate is a heavily anticipated economic event.