If the Federal Reserve decreases the money supply,then initially there is a
A)shortage in the money market,so people will want to sell bonds.
B)shortage in the money market,so people will want to buy bonds.
C)surplus in the money market,so people will want to sell bonds.
D)surplus in the money market,so people will want to buy bonds.

Question

Quizplus · Accepted Answer

When the Federal Reserve decreases the money supply, there is initially a shortage in the money market, leading people to sell bonds to obtain more money.

If the Federal Reserve Decreases the Money Supply,then Initially There