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

Question

Quizplus · Accepted Answer

An increase in the demand for money raises the interest rate in the short run as there is an increase in competition for available funds, resulting in lenders charging a higher interest rate to borrow money. An increase in the quantity of money would lower interest rates, while a decrease in the demand for money and an increase in bond prices would also lower interest rates.

In the Short Run, Which of the Following Actions Raise