Money & Bank MCQ
MB Chapter 5
When the growth rate of the money supply is increased, interest rates will fall immediately if the liquidity effect is _________ than the other money supply effects and there is ________ adjustment of expected inflation.
When the growth rate of the money supply is increased, interest rates will fall immediately if the liquidity effect is _________ than the other money supply effects and there is ________ adjustment of expected inflation.
When the growth rate of the money supply is increased, interest rates will fall immediately if the liquidity effect is _________ than the other money supply effects and there is ________ adjustment of expected inflation.
A) larger; fast
B) larger; slow
C) smaller; slow
D) smaller; fast
Answer: B
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