contestada

How do changes in interest rates affect the money supply?
a. As interest rates fall, people generally hold more cash, restricting the money supply.
b. As interest rates rise, people generally keep their wealth in assets that pay returns, expanding the
money supply.
C. As interest rates level off, people charge more and hold more cash, expanding the money supply.
d. As interest rates rise, people generally keep their wealth in assets that pay returns, restricting the
money supply.
Please select the best answer from the choices provided
Ο Α
ОВ
Ос
OD

Respuesta :

Answer:

Option C

Explanation:

Interest rate is directly proportional to mindset of people

  • If it rises people keep holding less money and stop the supply of money to market
  • If it falls people expands the money supply
Tundexi

The changes in interest rates affect the money supply because as interest rates fall, people generally hold more cash, restricting the money supply.

What are the effect of rise and fall of interest rates?

When there is a fall in interest rates its increases the amount of money people wish to hold while a rise in interest rates leads to a decreases that amount people wish to hold.

Therefore, the Option A is correct

Read more about interest rate

brainly.com/question/20714298

#SPJ2

Otras preguntas