Use the following 10 terms to fill in the blanks in the three sentences below. Certain words may be used more than once. buys
more
decrease
sells
from
smaller
increase
larger
less
to

Part I: Inflation occurs when there is a(n)
(1)
in buying, which, in turn, will
(2)
the supplies of items. People are willing to pay
(3)
if they believe there are
(4)
items available, so sellers
(5)
their prices.

Part II:
When the Federal Reserve
(6)
Treasury bonds
(7)
a bank, the money supply gets
(8)
. Since there are
(9)
available funds for the bank to loan, the interest rate the bank charges its customers for a loan will (10)

.

Part III:
When the Federal Reserve
(11)
Treasury bonds
(12)
a bank, the money supply gets
(13)
. Since there are
(14)
available funds for the bank to loan, the interest rate the bank charges its customers for a loan will
(15)
.