Open-market purchases by the Fed
A)make the price level and value of money fall.
B)make the price level rise,and make the value of money fall.
C)make the price level and make the value of money rise.
D)make the price level fall,and make the value of money rise.

Question

Quizplus · Accepted Answer

Open-market purchases by the Fed increase the money supply, which leads to an increase in the demand for goods and services. This increase in demand causes the price level to rise. At the same time, with more money in circulation, the value of money falls.

Open-Market Purchases by the Fed