If the Fed conducts open market sales, the equilibrium value of money decreases and the equilibrium price level increases.

Name: If the Fed conducts open market sales, the equilibrium value of money decreases and the equilibrium price level increases.
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Question

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Open market sales by the Fed reduce the money supply, which increases interest rates, leading to a decrease in investment and spending. This typically leads to a decrease in the price level, not an increase.

If the Fed Conducts Open Market Sales, the Equilibrium Value