When the Money Market Is Drawn with the Value of Money

question 147

Multiple Choice

When the money market is drawn with the value of money on the vertical axis,an increase in the money supply creates an excess

• A)supply of money,causing people to spend more.
• B)supply of money,causing people to spend less.
• C)demand for money,causing people to spend more.
• D)demand for money,causing people to spend less.

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Definitions:

Rate of Return

The advancement or decline in an investment’s worth over a stipulated period, framed as a percentage of the original investment amount.

Par Value

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

Annual Dividend

The total amount of dividends a shareholder receives per share within a year.

Market Rate

The prevailing interest rate available in the marketplace for securities or loans of a similar risk and maturity profile.