The supply of money curve is
A) upward sloping, showing the influence of the interest rate.
B) horizontal because interest rates are fixed at any one moment.
C) vertical because the quantity of money is fixed at any one moment.
D) downward sloping, showing the negative influence of the interest rate.
E) horizontal because the Fed controls the quantity of money supplied.

Question

Quizplus · Accepted Answer

The supply of money curve is vertical because the quantity of money supplied is fixed at any one moment. This means that the Fed controls the quantity of money supplied and can adjust it as needed, regardless of changes in the interest rate.

The Supply of Money Curve Is