If,at Some Interest Rate,the Quantity of Money Demanded Is Less

question 27

Multiple Choice

If,at some interest rate,the quantity of money demanded is less than the quantity of money supplied,people will desire to

• A)sell interest-bearing assets,causing the interest rate to decrease.
• B)sell interest-bearing assets,causing the interest rate to increase.
• C)buy interest-bearing assets,causing the interest rate to decrease.
• D)buy interest-bearing assets,causing the interest rate to increase.

---

Definitions:

Variable Costs

Expenses that change directly and proportionally with the level of production or sales volume, such as raw materials and direct labor.

Break-Even Point

The level of sales at which total revenues equal total costs, resulting in zero profit.

Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance premiums.

Variable Costs

Costs that change in proportion to the level of production or sales volume, such as raw materials and direct labor.