When Money Demand Increases, the Fed Cannot Keep the Money

question 38

True/False

When money demand increases, the Fed cannot keep the money supply from rising and the interest rate from rising at the same time.

---

Definitions:

Rate of Return

The increase or decrease in the value of an investment during a set timeframe, represented as a proportion of the investment's starting price.

CIFP Course Materials

Comprehensive learning materials provided for the Certified Financial Planner (CIFP) program covering financial planning, investment strategies, and ethical practices.

Ordinary Annuity

A financial product where payments are made at the end of each period for a fixed amount of time.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, often used in the discounting of future income streams or liabilities.