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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

Respuesta :

jepessoa

Answer:

The answers are:

  1. down
  2. 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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