The Effect of an Increase in the Nominal Interest Rate

question 541

Multiple Choice

The effect of an increase in the nominal interest rate on the demand for money curve is to

• A) shift the demand for money curve rightward.
• B) create a movement upward along the demand for money curve.
• C) create a movement downward along the demand for money curve.
• D) shift the demand for money curve leftward.

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Definitions:

Reverse Split

A reverse split is a stock market maneuver in which a company reduces the number of its existing shares to increase the share price without changing the company's market capitalization.

Information Content Effect

The impact of news or information release on the price and trading volume of securities.

Stock Split

A corporate decision to fragment its current shares into additional shares to raise the market fluidity of the shares.