If the Interest Rate in the Money Market Is Above

question 478

Multiple Choice

If the interest rate in the money market is above equilibrium,

• A) people buy bonds in exchange for money.
• B) a fall in the interest rate results in a shortage of money in equilibrium.
• C) the quantity of money demanded exceeds the quantity of money supplied.
• D) market forces raises the interest rate.

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Definitions:

Quarterly Dividend

A dividend paid by a company to its shareholders every quarter, representing a portion of the company's earnings.

Capital Gains

The profit earned from the sale of an asset or investment which has increased in value over the holding period.

Shares

Units of ownership in a company or financial asset that represent a portion of the total capital.

Dividend Yield

A company's yearly dividend disbursement compared to its stock price, shown as a financial ratio.