1. A rise in interest rates due to a decrease in the money supply will _____ aggregate demand.
A. not change
B. increase
C. reduce
D. cause random fluctuations in
2. A contractionary monetary policy is appropriate during a recession.
True
False
3. A sale of Treasury bills by the Federal Reserve _____ interest rates and _____ the money supply.
A. lowers; increases
B. raises; reduces
C. raises; increases
D. lowers; reduces