The money supply function is
A) downward sloping.
B) upward sloping.
C) vertical.
D) horizontal.
E) horizontal at first and then upward sloping.

Question

Quizplus · Accepted Answer

The money supply is determined by the central bank and is therefore independent of any other economic variables. As a result, the money supply function is vertical, shown as a straight line on a graph, indicating that the quantity of money is fixed and does not change with changes in interest rates or other economic variables.

The Money Supply Function Is