If Money Demand Increases and the Fed Does Not Alter

question 132

Multiple Choice

If money demand increases and the Fed does not alter its monetary policy,then

• A)the money supply will increase
• B)the money supply will decrease
• C)interest rates will decrease
• D)interest rates will increase
• E)velocity will decrease

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Definitions:

Dividend Yield

A stock’s cash dividend divided by its current price.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.

Reverse Stock Split

A corporate action in which a company reduces the total number of its outstanding shares to increase its share price.

Par Value

The face value of a bond or stock as stated by the issuing company, not necessarily its market value.