If the quantity of money demanded is $300 billion and the quantity of money supplied is $200 billion, then the interest rate will:
A) fall.
B) rise.
C) remain unchanged.
D) be in equilibrium.

Question

Quizplus · Accepted Answer

When the quantity of money demanded exceeds the quantity supplied, there is excess demand, which leads to an increase in the price of money - the interest rate. Therefore, the interest rate will rise in this scenario.

If the Quantity of Money Demanded Is $300 Billion and the Quantity