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25 April, 01:57

Continuing on the same train of thought, when the Fed decreasesdecreases the growth rate of the money supply, the price level effect drives the interest rate ▼

down/up

while the expected inflation rate pushes the interest rate ▼

down/up

+1
Answers (1)
  1. 25 April, 02:04
    0
    The answers are:

    down down

    Explanation:

    When the general prices level in an economy decreases (following a decrease in the money supply), the current inflation rate and the expected future inflation rate both decrease. If the expected inflation rate decreases, interest rates will also decrease.
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