What Happens in the Money Market When There Is an Increase

question 17

Multiple Choice

What happens in the money market when there is an increase in the supply of money?

• A) The equilibrium quantity of money increases and the equilibrium interest rate increases.
• B) The equilibrium quantity of money increases and the equilibrium interest rate decreases.
• C) The equilibrium quantity of money decreases and the equilibrium interest rate increases.
• D) The equilibrium quantity of money decreases and the equilibrium interest rate decreases.

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Definitions:

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