Question

By manipulating the money_____, the Federal reserve can change _____ rates, thus encouraging or dicouraging additional investment.

Answer 1

Answer:

Supply, interest

Explanation:

The money supply can be regarded as supply of all the currency as well as other liquid instruments in the economy of a particular country.

Money supply can be manipulated by central bank by influencing interest rates, as well as printing money. The federal reserve can also engage in open market operations which is the selling/buying security or bond of government. It should be noted that By manipulating the money supply the Federal reserve can change interest rates, thus encouraging or dicouraging additional investment.