It Is Possible That When the Money Supply Rises,interest Rates

question 47

Multiple Choice

It is possible that when the money supply rises,interest rates may ________ if the ________ effect is more than offset by changes in income,the price level,and expected inflation.

• A)fall;liquidity
• B)fall;risk
• C)rise;liquidity
• D)rise;risk

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Definitions:

Operating Assets

Assets used in the day-to-day operations of a business that are essential for generating revenue, excluding investments and non-operational assets.

Minimum Required Return

The smallest return on investment that an investor is willing to accept, considering the risk associated with the investment.

Cost Center

A department or segment within a company where costs can be allocated, but that does not directly contribute to profit, primarily used for budgeting and control purposes.

Investment Center

A business unit or division that is responsible for its own revenues, expenses, assets, and returns, and is evaluated on its profitability and efficiency in using its assets.