If the Quantity of Money Demanded Exceeds the Quantity of Money

question 12

Multiple Choice

If the quantity of money demanded exceeds the quantity of money supplied,then

• A)the quantity of nonmonetary assets demanded exceeds the quantity supplied.
• B)the quantity of nonmonetary assets supplied exceeds the quantity demanded.
• C)the quantity of nonmonetary assets demanded will still equal the quantity supplied, all else being equal.
• D)you can make no conclusions about the relative supply and demand of nonmonetary assets.

---

Definitions:

Interest Rate

The cost of borrowing money expressed as a percentage of the total amount loaned, paid by the borrower for the use of funds.

Equilibrium Interest

The interest rate at which the quantity of loanable funds demanded equals the quantity supplied, balancing savings and borrowing.

Loanable Funds

The money available for borrowing in the financial markets, influenced by interest rates and economic conditions.

Useful Life

The period during which an asset is expected to be usable for its intended purpose.