1. When the Federal Reserve increases the money supply

Question options:

	the liquidity effect predicts higher inflation while the fisher effect predicts lower inflation
	the liquidity effect predicts lower inflation while the fisher effect predicts higher inflation
	both the liquidity effect and the fisher effect predict lower inflation
	both the liquidity effect and the fisher effect predict higher inflation

2. With an increase in inflation expectations

Question options:

	both the price of bonds and the interest rate rises
	both the price of bonds and the interest rate falls
	the price of bonds fall and the interest rate rises
	the price of bonds rises and the interest rate falls