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The Money Supply Is Almost Perfectly Inelastic Because

Question 50

Multiple Choice

The money supply is almost perfectly inelastic because:


A) people will want to be supplied with more loans as interest rates rise.
B) the Fed makes more money available in response to higher interest rates.
C) banks generally find loans more profitable than keeping their assets as cash
D) the Fed lowers the discount rate as interest rates rise.
E) commercial banks can face losses at lower rates of interest.

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