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Suppose stock prices rise. To offset the resulting change in output the Federal Reserve could Group of answer choices increase interest rates. This decrease would also move the price level closer to its value before the rise in stock prices. decrease interest rates. This increase would also move the price level closer to its value before the rise in stock prices. decrease interest rates. However, this increase would move the price level farther from its value before the rise in stock prices. increase interest rates. However, this decrease would move the price level farther from its value before the rise in stock prices.

Respuesta :

Answer:

increase interest rates. This decrease would also move the price level closer to its value before the rise in stock prices.

Explanation:

In the stock market, the prices of stocks and interest rates are inter-related. This is a mode adopted by some government in the control of the prices of stock as well as inflation in the country.

In a situation where the stock prices increases, that means, people selling it off at that point would have access to much money thereby creating excess influx. In order to solve this, increasing the interest rate would bring the price level closer to its value before the actual rise in stock.

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