Like a commodity, the money supply curve is upward sloping, reflecting the fact that the quantity of money supplied raises with the interest rate in the money market.

Question

Quizplus · Accepted Answer

The money supply curve is actually vertical in the short run, meaning that the quantity of money supplied is fixed and is not affected by changes in the interest rate. In the long run, the money supply curve is upward sloping due to the ability of banks to create money through lending activities, but this is a more complex concept that is not reflected in the question.

Like a Commodity, the Money Supply Curve Is Upward Sloping