contestada

If the Federal Reserve decreased the money supply, what would the effects be? Check all that apply.
A. decreased interest rates
B. increased interest rates
C. decreased borrowing
D. increased borrowing
E. decreased investing
F. increased investing

Respuesta :

Answer:

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

Explanation:

  • The decreasing of money supply by the Federal Reserve would lead to the shortage of printed money in the market. To make optimum use of the money available, the banks would increase the interest rates.
  • The increased interest rates would refrain people from borrowing money from the banks as they would not be willing to pay back more.
  • When there would be no money or less money in people's hands, they would be unable to invest elsewhere.

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

The following information should be followed:

  • The reduction of the money supply by the Federal Reserve would result to the shortage of printed money in the market.
  • For making the optimum use of the money available, the banks should increase the interest rates.
  • The increased interest rates should refrain people from borrowing the money from the banks because they should not be willing to pay back more.

Learn more: brainly.com/question/17429689