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 supply of money if the interest rate increases?

Question

Quizplus · Accepted Answer

The supply of money is typically controlled by the central bank and is not directly affected by changes in the interest rate. The interest rate affects the demand for money, but the supply is usually set independently.

Firms Often Seek to Borrow Money to Expand Their Capital