Assume the Fed Has Complete Control Over the Money Supply

Multiple Choice

Assume the Fed has complete control over the money supply. If the demand for money were less than the supply of money, we would expect

A) an increase in the quantity of money demanded and a decline in the rate of interest.
B) a decrease in the quantity of money demanded and an increase in the rate of interest.
C) a decrease in the quantity of money supplied, a decrease in the quantity of money demanded, and an increase in the rate of interest.
D) a decrease in the quantity of money demanded and a decrease in the rate of interest.
E) an increase in the quantity of money supplied, a decrease in the quantity of money demanded, and an increase in the rate of interest.