If There Is an Excess Supply of Money

question 28

Multiple Choice

If there is an excess supply of money

• A) the interest rate falls.
• B) the interest rate rises.
• C) the real money supply shifts left to make an equilibrium.
• D) the real money supply shifts right to make an equilibrium.
• E) the interest rate stays constant, but consumer confidence falters.

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Definitions:

Variable Cost

Costs that change in proportion to the good or service that a business produces.

Quantity of Output

The total amount of goods or services produced by a firm or economy over a specific period.

Total Cost

The total expenses involved in creating goods or services, encompassing both constant and changeable costs.

Average Variable Cost

The cost per unit of variable inputs divided by the total output, showing the variable cost component of producing each unit.