An increase in the supply of money, other things being equal, will raise the equilibrium interest rate.

Question

Quizplus · Accepted Answer

According to the demand and supply framework for loanable funds, an increase in the supply of money will lead to a decrease in the interest rate. This is because there will be a larger supply of funds available to lend, making it easier and cheaper for borrowers to access credit. Therefore, the statement is false.

An Increase in the Supply of Money, Other Things Being