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If the Federal Reserve Increases Its Bond Purchases, the Short-Run

Question 169

Multiple Choice

If the Federal Reserve increases its bond purchases, the short-run effects will be


A) an increase in the money supply and lower real interest rates.
B) a decrease in the money supply and lower real interest rates.
C) an increase in the money supply and higher real interest rates.
D) a decrease in the money supply and higher real interest rates.

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