Firms often seek to borrow money to expand their capital stock, and the price they pay for the money is the interest rate.What happens to the quantity of money supplied if the interest rate increases?

Question

Quizplus · Accepted Answer

When the interest rate increases, the quantity of money supplied typically increases because higher interest rates provide more incentive for lenders to supply money, as they can earn more from the interest.

Firms Often Seek to Borrow Money to Expand Their Capital