If, in the Market for Money, the Quantity of Money

question 319

Multiple Choice

If, in the market for money, the quantity of money demanded exceeds the money supply, the interest rate will

• A) fall, causing households and businesses to hold less money.
• B) rise, causing households and businesses to hold less money.
• C) rise, causing households and businesses to hold more money.
• D) fall, causing households and businesses to hold more money.

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Definitions:

Personal Preference

An individual's inclination or liking for specific choices or options over others.

Social Consensus

The degree of agreement among members of a society or group on beliefs, behaviors, or values.

Public Agreement

A consensus or accord reached openly among the general populace or within a specific group.

Hedonistic Principle

The idea that individuals seek pleasure and avoid pain, guiding much of human behavior and decision-making.