Which one of the following statements is the most accurate?

Question

Quizplus · Accepted Answer

The most accurate statement is that an increase in the money supply lowers the interest rate while a fall in the money supply raises the interest rate, given both the price level and output. This is because an increase in the money supply leads to an increase in the supply of loanable funds, which decreases the interest rate, while a decrease in the money supply leads to a decrease in the supply of loanable funds, which increases the interest rate. Both the price level and level of output can impact the amount of money people want to hold and their demand for credit, which can in turn impact the interest rate.

Which One of the Following Statements Is the Most Accurate