The growth rate of the money supply
A)increases during both booms and recessions.
B)increases during booms and falls during recessions.
C)falls during booms and increases during recessions.
D)falls during both booms and recessions.

Question

Quizplus · Accepted Answer

During booms, the demand for credit and money increases, leading to an increase in the money supply. During recessions, there is a decrease in demand for credit and money, leading to a decrease in the money supply. Therefore, option B is the correct answer.

The Growth Rate of the Money Supply