English, asked by pushpanov12, 4 months ago

How does the increase affect the equilibrium interest rate?

Answers

Answered by anshika1802

4

Answer:

Hello mate

Explanation:

If the Fed increases the money supply, the supply curve shifts to the right and the equilibrium interest rate falls. Likewise, if the Fed decreases the money supply, the supply curve shifts to the left and the equilibrium interest rate will rise. ... The equilibrium rate of interest will increase from i1* to i2*.

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