If at the Prevailing Interest Rate the Quantity of Money

question 74

Multiple Choice

If at the prevailing interest rate the quantity of money demanded is $2 trillion, and the supply of money is $1.5 trillion, then which of the following is true ?

• A) There is a shortage of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market.
• B) There is a surplus of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market.
• C) There is shortage of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.
• D) There is a surplus of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.

Prepare and analyze classified and unclassified balance sheets.

Understand and perform journal entries for transactions in governmental and enterprise funds.

Distinguish between types of fund financial statements and government-wide financial statements.

Understand the purpose and components of government-wide financial statements.

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