If people decide to hold less money, then
a. money demand decreases, there is an excess supply of money, and interest rates rise.
b. money demand decreases, there is an excess supply of money, and interest rates fall.
c. money demand increases, there is an excess demand for money, and interest rates fall.
d. money demand increases, there is an excess demand for money, and interest rates rise.
b
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First-mover advantage is a characteristic of
a. A simultaneous-move game b. A dominant strategy c. A sequential-move game d. All of the above
Financial markets pay close attention to changes in the federal funds rate because these changes ________.
A. directly affect the interest payments on the national debt B. affect other interest rates in the economy C. directly affect a large volume of loans D. indicate commercial bank lending policies