The money supply curve is:
A) downward sloping.
B) vertical.
C) upward rising.
D) horizontal.

Question

Quizplus · Accepted Answer

The money supply curve is generally considered to be vertical because it is determined by the actions of monetary authorities, such as the Federal Reserve, and is not affected by changes in interest rates or other market factors. This means that the quantity of money in circulation is fixed at any given point in time, and changes only when the monetary authorities choose to increase or decrease it. As a result, the money supply curve is generally depicted as a vertical line on a graph, rather than a sloping curve like most other economic variables.

The Money Supply Curve Is