Refer to the given figure where the nominal interest rate equals 6 percent and the money supply equals 600.
If the Federal Reserve wants to raise the interest rate to 8 percent, it must ________ the money supply to ________.
A. decrease; 400
B. increase; 800
C. decrease; 800
D. increase; 400
Answer: A
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What will be an ideal response?
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What will be an ideal response?