What happens in the credit market when the Fed buys bonds? X A. Investment demand decreases. B. Interest rates rise. C. Interest rates fall. D. Investment demand becomes inelastic. X Incorrect X Question 5 What can the Fed do to pursue a contractionary monetary policy? A. Buy bonds 0 points B. Change its demand for money C. Sell bonds D. Change its demand for investment ^ X Question 7 0 points What happens when money demand is elastic and the Fed buys bonds? A. Interest rates decrease a lot. B. Interest rates are unchanged. C. Interest rates decrease only a little. D. Interest rates increase a lot. X Question 9 When is monetary policy most effective? X A. When money demand is inelastic and investment demand is elastic. 0 points B. When both money demand and investment demand are inelastic. C. When both money demand and investment demand are elastic. D. When money demand is elastic and investment demand is inelastic. X Incorrect X Question 10 0 points Use the data in this table to answer question 10. Answer here 8 M V Q 5% 2% 3% What is the value of P when M, V, and Q are as shown above?