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Suppose That Both the Nominal Money Supply and the Demand

Question 63

Multiple Choice

Suppose that both the nominal money supply and the demand for money increase at the same time. We can conclude that:


A) the equilibrium interest rate and the equilibrium stock of money will fall.
B) the equilibrium interest rate will rise but we cannot say what happens to the equilibrium money stock.
C) the equilibrium money stock will rise but we cannot say whether the equilibrium interest rate will rise,
Fall, or remain constant.
D) the equilibrium interest rate and the equilibrium money stock will rise.

Correct Answer:

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