Milton Friedman Contends That It Is Entirely Possible That When

question 35

Multiple Choice

Milton Friedman contends that it is entirely possible that when the money supply rises,interest rates may ________ if the ________ effect is more than offset by changes in income,the price level,and expected inflation.

• A) fall; liquidity
• B) fall; risk
• C) rise; liquidity
• D) rise; risk

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Definitions:

Present Value

Present value is a financial concept that represents the current value of a future amount of money or stream of cash flows, discounted at a specified rate of return.

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in the valuation of investments.

Time Periods

Distinct intervals of time within which certain activities or events occur or are completed.

Simple Interest

Simple interest is a method of calculating the interest charge on a loan based on the original principal balance without compounding.