If the Quantity of Money Demanded Is Less Than the Quantity

question 18

Multiple Choice

If the quantity of money demanded is less than the quantity of money supplied, then the

• A) interest rate stays the same.
• B) interest rate will increase.
• C) interest rate will decrease.
• D) effect on the interest rate is indeterminate.

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Definitions:

Direct Labor

The wages and benefits paid to workers who are directly involved in the production of goods.

Raw Materials

The basic materials that are used in the production process of goods, which will be transformed into finished products.

Finished Goods

Items that have finished the production cycle and are available for purchase by consumers.

Forecast

The process of making predictions about future events or trends based on historical data and analysis.