When the Quantity of Money Demanded Exceeds the Quantity of Money

question 291

Multiple Choice

When the quantity of money demanded exceeds the quantity of money supplied:

• A) people offering to sell non-monetary financial assets must increase the interest rate these assets pay to sell them.
• B) interest rates will fall.
• C) the opportunity cost of holding money will fall.
• D) more people will hold money.

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Definitions:

Without Recourse

A term indicating that the holder of a financial instrument cannot demand payment from the original issuer in case of default.

Endorse

To give support or public approval to someone or something, often used in the context of endorsing products, services, or candidates.

Negotiable Instruments

Written documents guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee's name written on the document.

Notice

A formal communication or declaration given by one party to another, often required by law or agreement, to inform or warn of actions taken or impending.