When There Is an Excess Supply of Money

question 63

Multiple Choice

When there is an excess supply of money,

• A)people will try to get rid of money causing interest rates to rise.Investment increases.
• B)people will try to get rid of money causing interest rates to fall.Investment decreases.
• C)people will try to get rid of money causing interest rates to fall.Investment increases.
• D)people will try to get rid of money causing interest rates to rise.Investment decreases.

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Definitions:

Paid-In Capital

The amount of money a company has received from shareholders in exchange for shares of stock, beyond the par value of the shares.

Basic Earnings

The amount of net income available to common shareholders, divided by the common shares outstanding, representing a straightforward measure of earnings without adjustment.

Common Shares

Equity securities that represent ownership interest in a corporation, entitling shareholders to dividends and a say in corporate matters.

Weighted Average

A calculation that takes into account both the quantity and the significance of each item in a set to find an average that is influenced by the size or weight of each component.