Which of the following statements is true?
A) The demand curve for money balances represents a direct relationship between the quantity demanded of money balances and the price of holding money balances.
B) In the United States,the position of the money supply curve is determined exclusively by the Fed.
C) The "money market" discussed in this chapter refers to the market for short-term securities.
D) If,at a given interest rate,individuals want to hold less money than is supplied,this will put downward pressure on the interest rate.
E) none of the above

Question

Quizplus · Accepted Answer

The statement D is true because in the context of the money market, if individuals wish to hold less money than is supplied at a given interest rate, they are likely to invest the excess money in interest-bearing assets, which increases the supply of loanable funds and puts downward pressure on the interest rate.

Which of the Following Statements Is True