Asked by
Jasmeet Bharj
on Nov 16, 2024
Verified
A decrease in the money supply causes the interest rate to rise so that investment falls.
Money Supply
The entirety of financial assets at a specific point in time within an economy, including the total of cash, coins, and balances in savings and checking accounts.
Interest Rate
The fee a lender imposes on a borrower for utilizing assets, denoted as a portion of the primary sum.
- Comprehend the impact of modifications in the money supply on interest rates, investment expenditures, and the overall demand.
Verified Answer
GS
Learning Objectives
- Comprehend the impact of modifications in the money supply on interest rates, investment expenditures, and the overall demand.