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.

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Definitions:

Resilient Children

Children who are able to withstand and recover quickly from difficult conditions such as trauma, adversity, or stress.

Regulate Emotions

The capacity to control and react to feelings in a constructive and beneficial way.

School

An institution for educating children.

Traumatic

Referring to experiences or events that are emotionally disturbing or distressing, capable of causing long-term psychological impact.