In the short run, which of the following actions raise the interest rate?
A) a decrease in the demand for money
B) an increase in the demand for money
C) an increase in the quantity of money
D) an increase in bond prices

Question

Quizplus · Accepted Answer

An increase in the demand for money would raise the interest rate in the short run because as people demand more money, there is less available to lend out, causing lenders to set higher interest rates in order to attract borrowers.

In the Short Run, Which of the Following Actions Raise