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If Both the Demand for Money and the Supply of Money

Question 63

Multiple Choice

If both the demand for money and the supply of money increase,what can we conclude will happen to the equilibrium?


A) The interest rate will fall,but the effect on quantity of money is indeterminate.
B) The interest rate will rise,but the effect on the quantity of money is indeterminate.
C) The quantity of money will increase,but the effect on the interest rate is indeterminate.
D) The quantity of money will fall,but the effect on the interest rate is indeterminate.
E) Both the interest rate and the quantity of money will increase.

Correct Answer:

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