Use the following figure to answer the question :

-In the figure above,the factor responsible for the decline in the interest rate is
A)a decline the price level.
B)a decline in income.
C)an increase in the money supply.
D)a decline in the expected inflation rate.

Question

Use the following figure to answer the question :

-In the figure above,the factor responsible for the decline in the interest rate is
A)a decline the price level. 
B)a decline in income. 
C)an increase in the money supply. 
D)a decline in the expected inflation rate.

Quizplus · Accepted Answer

An increase in the money supply typically leads to a decline in interest rates because more money available means banks can lend more easily, reducing the cost of borrowing.

Use the Following Figure to Answer the Question