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In 2005-2006, the Fed Increased Interest Rates in an Attempt

Question 125

Multiple Choice

In 2005-2006, the Fed increased interest rates in an attempt to halt inflation.What was the most likely effect of raising interest rates on velocity?

A) Velocity will decrease.
B) Velocity will increase.
C) Velocity will remain constant.
D) Velocity is unrelated to saving accounts.

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