When the supply of money increases, what happens to the interest rate? A. the interest rate decreases B. the interest rate increases

K The graph shows the demand for money curve. Draw a point to show the interest rate and quantity of money demanded when the interest rate is 5 percent a year. Draw an arrow to show the effect of an increase in the interest rate above 5 percent a year. Label it 1. Draw an arrow to show the effect of a decrease in the interest rate below 5 percent a year. Label it 2. When the interest rate rises, other things remaining the same, the opportunity cost of holding money and A. rises; the demand for money decreases B. falls; the demand for money increases O C. falls; the quantity of money demanded increases OD. rises; the quantity of money demanded decreases 8- 6- 4 2- 0+ Interest rate (percent per year) 2.7 MDO 2.9 3.1 3.3 Real money (trillions of 2007 dollars) >>> Draw only the objects specified in the question. 3.5 € G

1. Currently the prime interest rate, which is the interest rate given to customers with the best credit, in the United States is 3.25% and the inflation rate is 1.3%. a. How much is the real interest rate? b. What will happen to the real interest rate if – all else equal – the inflation rate increases? Provide an example to support your answer. How will the change in the real interest rate from part b, affect the quantity of savings in the United States? How will this change affect the supply of loanable funds. C.

All else equal, suppose the interest rate rise from 3% to 3.5%. What will happen in the supply of money? a. Shifts to the right. b. Shifts to the left. c. An upward movement along the supply curve. d. An downward movement along the supply curve. e. The supply will remain unchanged.

Suppose there is an increase in money supply, as a result interest rates will Multiple Choice rise and the quantity of money will increases. fall and the quantity of money will remain constant. rise and the quantity of money will decrease. fall and the quantity of money will increases.

What effect does inflation have on the purchasing power of money? A. It increases the purchasing power of money. B. It decreases the purchasing power of money. C. It has no effect on the purchasing power of money. D. It initially decreases but then increases the purchasing power of money over time.

Question 8 If the quantity of money demanded exceeds the quantity of money supplied, then the: effect on the interest rate is indeterminate. interest rate will decrease. interest rate stays the same. interest rate will increase.

The ___ is the nominal interest rate minus the rate of inflation.     Question 13 options:   real GDP   real interest rate   annualized interest rate   nominally adjusted