Interest rates and the money supply tend to vary inversely, at least in the short term.

Name: Interest rates and the money supply tend to vary inversely, at least in the short term.
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Question

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When the central bank increases the money supply, interest rates tend to fall because there is more money available for borrowing. Conversely, when the money supply is reduced, interest rates tend to rise due to the decreased availability of money for lending.

Interest Rates and the Money Supply Tend to Vary Inversely