If the Money Supply Increases,the Interest Rate Will __________ and People

question 30

Multiple Choice

If the money supply increases,the interest rate will __________ and people will want to hold a __________ quantity of money.

• A)rise; greater
• B)rise; smaller
• C)not change; greater
• D)fall; greater
• E)fall; smaller

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Definitions:

Disposable Personal Income

The sum of money remaining for savings and expenditures in households once income taxes are deducted.

National Income

The total amount of money earned by a nation's people and businesses, including wages, rent, interest, and profits.

Market Prices

The current prices at which goods and services are being sold in the market, determined by the forces of supply and demand.

Goods and Services

The output produced by a country's economy that can be physically consumed or used to provide a service.