If the Current Interest Rate Increases

question 37

Multiple Choice

If the current interest rate increases,

• A)the money demand curve shifts downward and the money supply curve remains unchanged.
• B)the money demand curve shifts upward and the money supply curve remains unchanged.
• C)there is a movement along the money demand curve and the money supply curve increases.
• D)there is a movement along the money demand curve and the money supply curve remains unchanged.

---

Definitions:

Demand For Loanable Funds

The total quantity of loans that borrowers are willing to take out at various interest rates, holding all else equal.

Equilibrium Interest Rate

The interest rate at which the quantity of loanable funds demanded equals the quantity supplied, leading to a balance in the money market.

Equilibrium Level Of Saving

The point at which the amount households save equals the amount they invest, resulting in a balance within the economy's financial resources.

U.S. Government Debt

The total amount of money that the United States federal government owes to creditors, including both public debt and intra-governmental obligations.