The effect of a change in the money supply on interest rates will be greater the steeper the demand for money curve.

Name: The effect of a change in the money supply on interest rates will be greater the steeper the demand for money curve.
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Question

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A steeper demand for money curve indicates that the quantity of money demanded is less sensitive to changes in interest rates, meaning that any change in the money supply will have a larger impact on interest rates.

The Effect of a Change in the Money Supply on Interest