If the Fed increases the discount rate, what happens to the money supply?

A. Increases
B. Decreases
C. Stays the same
D. None of these


Answer: B

Economics

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Other things being equal, a higher price induces

A) buyers to reduce the amount they want to buy and sellers to increase the amount they are willing to sell. B) buyers to increase the amount they want to buy and sellers to reduce the amount they are willing to sell. C) buyers to reduce the amount they want to buy and sellers to reduce the amount they are willing to sell. D) buyers to increase the amount they want to buy and sellers to increase the amount they are willing to sell.

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