If money demand increases and the Fed does not alter its monetary policy,then
A)the money supply will increase
B)the money supply will decrease
C)interest rates will decrease
D)interest rates will increase
E)velocity will decrease

Question

Quizplus · Accepted Answer

When money demand increases and the Fed does not change its monetary policy, the money supply remains constant, leading to higher interest rates as people compete for the available money.

If Money Demand Increases and the Fed Does Not Alter