Milton Friedman called the response of lower interest rates resulting from an increase in the money supply the ________ effect.
A)liquidity
B)price level
C)expected-inflation
D)income

Question

Quizplus · Accepted Answer

The lower interest rates resulting from an increase in the money supply increase the availability of funds, making it more liquid. This is known as the liquidity effect, as identified by Milton Friedman.

Milton Friedman Called the Response of Lower Interest Rates Resulting