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17 January, 01:14

When the money market is drawn with the value of money on the vertical axis, if the Federal Reserve buys bonds, then the money supply curve.

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  1. 17 January, 01:23
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    The correct answer is: shifts rightward, causing the price level to rise.

    Explanation:

    The money supply curve portraits the money supplied in the market at a specific interest rate. The money supply is increased by the central bank by purchasing bonds or other assets - in this case, the Federal Reserve - causing the money supply curve more to the right which at the same time lowers the interest rate.
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