In the short run, when the Fed increases the quantity of money, the
A)price level decreases.
B)quantity demanded of money decreases.
C)demand for money decreases.
D)demand for money increases.
E)nominal interest rate falls.

Question

Quizplus · Accepted Answer

In the short run, an increase in the money supply by the Fed typically leads to a decrease in the nominal interest rate, as there is more money available for lending.

In the Short Run, When the Fed Increases the Quantity