A shortage of money in the money market can be eliminated through

Question

Quizplus · Accepted Answer

A shortage of money indicates that there is less money available in the market than the demand for it. To eliminate this shortage, the money supply needs to be increased by the central bank injecting more money into the market. This can be done through various monetary policy tools like buying government securities, lowering reserve requirements for banks, or lowering interest rates on loans to encourage borrowing and spending. The other options - an increase in nominal aggregate output or an increase in the price level - may lead to an increase in demand for money, but they do not directly address the shortage of money in the market.

A Shortage of Money in the Money Market Can Be