5 Questions
What is the role of the Federal Reserve in managing the money supply in America?
The Federal Reserve is responsible for managing the money supply in America.
What happens to interest rates when the Fed limits the money supply?
Interest rates rise when the Fed limits the money supply.
How does limiting the money supply affect borrowing costs?
Limiting the money supply leads to higher borrowing costs.
What is the intended effect of limiting the money supply?
The intended effect of limiting the money supply is to slow down inflation.
What is the risk associated with limiting the money supply?
The risk associated with limiting the money supply is that it may slow economic growth too much, leading to more unemployment.
Test your knowledge on money supply and its impact on the economy with this informative quiz. Explore different types of money supply and understand how it affects interest rates, inflation, and the business cycle.
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