What Happens in the Money Market When There Is a Decrease

question 137

Multiple Choice

What happens in the money market when there is a decrease 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.

---

Definitions:

Common Stock

Type of equity security that represents ownership in a corporation, with voting rights and the potential for dividends.

Earnings Per Share

A calculation that indicates the portion of a company's profit allocated to each outstanding share of common stock.

Common Stock

A type of security that represents ownership in a corporation, with holders typically having voting rights.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset over its useful life to reflect wear and tear or obsolescence.