Question

Select the items that describe what most likely happens when the Federal Reserve increases the money supply (and people are confident in the economy).

Interest rates rise.


Businesses borrow more money.


Consumption increases.


Interest rates fall.

Answer 1

Consumption increases and interest rates fall.

Step-by-step explanation:

odyssey ware

Answer 2

Select the items that describe what most likely happens when the Federal Reserve increases the money supply (and people are confident in the economy).

Consumption increases and interest rates fall.

If there is more money in the economy, then there is an increase in the money supplied and consumed. Due to more being available to 'claim' more people are working and buying items they may not have otherwise and the interest rates start to fall because people aren't borrowing as much.