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Which one of the following will likely happen if the central bank announces a fall in short term interest rates from 4% to 2% when

image text in transcribed Which one of the following will likely happen if the central bank announces a fall in short term interest rates from 4% to 2% when the market was expecting short term interest rates to remain at 4% according to the "announcement effect" hypothesis? Select one: a. The money supply is unchanged and the price of Treasury bills falls. b. The money supply falls, the price of Treasury bills falls. c. The money supply rises and the price of Treasury bills rises. d. The money supply is unchanged and the price of Treasury bills rises Which one of the following will likely happen if the central bank announces a fall in short term interest rates from 4% to 2% when the market was expecting short term interest rates to remain at 4% according to the "announcement effect" hypothesis? Select one: a. The money supply is unchanged and the price of Treasury bills falls. b. The money supply falls, the price of Treasury bills falls. c. The money supply rises and the price of Treasury bills rises. d. The money supply is unchanged and the price of Treasury bills rises

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