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  3. Study Set
    Principles of Economics Study Set 8
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    Exam 34: The Influence of Monetary and Fiscal Policy on Aggregate Demand
  5. Question
    When the Fed Increases the Money Supply, the Interest Rate
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When the Fed Increases the Money Supply, the Interest Rate

Question 93

Question 93

True/False

When the Fed increases the money supply, the interest rate decreases. This decrease in the interest rate increases consumption and investment demand, so the aggregate-demand curve shifts to the right.

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