2 years ago

What happened when the Federal Reserve limited the money supply?

2 answers:

8 0

The correct answer is: "The limited access to currency stifled business growth."

When the money supply is limited, there is scarcity in the money market and the interest rate (the price of money) rises. Therefore, through this price adjustment, equilibrum is reached in the market again.

High interest rates disincentivate investment because borrowing funds to finance new projects has become relatively more expensive. Therefore, businesses will not conduct expansion policies under this scenario.

qaws [65]2 years ago

3 0

Answer:

The limited access to currency stifled business growth.

Explanation:

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