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Macroeconomics

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Effects of an Increase in Money on the Money Market

MACRO-KBNBGY

If the money supply rises, then…

A

the money market clears with a lower interest rate and more real money is held.

B

the money market clears with a higher interest rate and more real money is held.

C

the money market clears with a lower interest rate and less real money is held.

D

the money market clears with a higher interest rate and less real money is held.

E

It is not clear what happens to the interest rate and real money held in the money market.