If the Nominal Interest Increases, Then

question 109

Multiple Choice

If the nominal interest increases, then:

• A) the money supply increases.
• B) the money supply decreases.
• C) the demand for money increases.
• D) the demand for money decreases.

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Definitions:

Accounts Payable

Money owed by a business to its suppliers shown as a liability on the company’s balance sheet.

Just-in-time

An inventory strategy companies use to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.

Restrictive Policy

Measures taken by a government or financial institution to limit borrowing and spending in an attempt to curb inflation or stabilize the economy.

Neutral Policy

A stance or policy adopted by an organization or government that is neither supportive nor against a particular issue, aiming for a balanced approach.