If Money Demand Increases and the Fed Does Not Alter

question 132

Multiple Choice

If money demand increases and the Fed does not alter its monetary policy,then

• A)the money supply will increase
• B)the money supply will decrease
• C)interest rates will decrease
• D)interest rates will increase
• E)velocity will decrease

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Definitions:

Inventory Turnover

A ratio that shows how many times a company's inventory is sold and replaced over a specified period, indicating the efficiency of inventory management.

Operating Cycle

The amount of time it takes for a business to purchase inventory, sell products, and receive cash in exchange for those products, reflecting the efficiency of a company's cash flow.

Accounts Receivable Turnover

A financial metric that assesses how efficiently a company collects on the credit it extends to customers by measuring how often receivables are collected during a period.

Accounts Receivable

Money owed to a company by its customers for goods or services delivered but not yet paid for.