If at Some Interest Rate the Quantity of Money Supplied

question 85

Multiple Choice

If at some interest rate the quantity of money supplied is greater than the quantity of money demanded, what will people desire to do and what happens to the interest rate?

• A) People will sell interest-bearing assets, causing the interest rate to decrease.
• B) People will sell interest-bearing assets, causing the interest rate to increase.
• C) People will buy interest-bearing assets, causing the interest rate to decrease.
• D) People will buy interest-bearing assets, causing the interest rate to increase.

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Definitions:

Former Soviet Union

Refers to the socialist federation that existed from 1922 to 1991, comprising several republics including Russia, Ukraine, and others, which disbanded to become independent countries.

U.S. Labor Relations

The interaction between labor unions, employers, and the government in the United States, focusing on the negotiation and enforcement of labor contracts and the rights and obligations of parties in the workplace.

German Labor Law

A set of legal statutes in Germany that governs employment relationships, worker protections, union activities, and workplace conditions.

Works Councils

Employee representative bodies in a company or organization that participate in discussing and often co-determining company policies on behalf of the workers.