If money demand shifted to the right and the Federal Reserve desired to return the interest rate to its original value,it could
A)buy bonds to increase the money supply.
B)buy bonds to decrease the money supply.
C)sell bonds to increase the money supply.
D)sell bonds to decrease the money supply.

Question

Quizplus · Accepted Answer

To return the interest rate to its original value after a rightward shift in money demand, the Federal Reserve would buy bonds to increase the money supply, which would lower interest rates.

If Money Demand Shifted to the Right and the Federal