Which of the Following Is True of Money Supply

question 26

Multiple Choice

Which of the following is true of money supply?

• A) As interest rates increase, the central bank reduces the supply of money.
• B) The supply of money is highly responsive to changes in the demand for money.
• C) The supply of money is perfectly interest inelastic.
• D) As interest rates increase, central banks increase the supply of money.

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Industry Average

A benchmark or average measurement of performance or financial metrics within a particular industry sector.

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A financial state in which an entity can no longer meet its debt obligations, leading to legal consequences such as bankruptcy.