At higher income levels the interest rate must be lower to achieve money market equilibrium.

Name: At higher income levels the interest rate must be lower to achieve money market equilibrium.
Brand: Quizplus
Rating: 5.0 (39 reviews)

Question

Quizplus · Accepted Answer

At higher income levels, the demand for money increases, which in turn increases the interest rate needed to reach money market equilibrium. This is known as the liquidity effect. Therefore, the statement is false.

At Higher Income Levels the Interest Rate Must Be Lower