Suppose the Federal Reserve decides to increase the money supply. Which statement predicts the most likely effect? (3 points)
a
Interest rates will rise, meaning that banks will give fewer loans and prices for goods and services will fall.
b
Interest rates will fall, meaning that banks will give more loans and more businesses can open and hire workers.
c
Interest rates will fall, meaning that prices will rise and businesses will not hire many workers.
d
Interest rates will rise, meaning that people will want to get more loans and prices will rise.
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