Which one of these statements is correct?
A)The lower the interest rate,the higher the opportunity cost of holding assets in the form of money.
B)The quantity of money supplied is independent of the interest rate.
C)The larger the supply of money,the higher the interest rate,all things equal.
D)Travelers checks and government bonds are equally liquid assets.
E)The demand for money increases whenever the price level decreases.

Question

Quizplus · Accepted Answer

The quantity of money supplied is typically determined by the central bank or monetary authority of a country and does not directly depend on the interest rate. Interest rates influence the demand for money but not the supply, which is controlled through policy decisions.

Which One of These Statements Is Correct