The Fed can determine how the money demand curve has shifted by
A) studying interest rate changes
B) looking at the number of new loans
C) studying unemployment compensation claims
D) experimenting with changes in credit conditions
E) checking the size of the federal budget deficit

Question

Quizplus · Accepted Answer

The Fed can determine how the money demand curve has shifted by studying interest rate changes. When interest rates increase, the demand for money typically decreases, and when interest rates decrease, the demand for money typically increases. By monitoring changes in interest rates, the Fed can determine how the demand for money has shifted and adjust monetary policy accordingly.

The Fed Can Determine How the Money Demand Curve Has