Figure 4.3

-In Figure 4.3,the factor responsible for the decline in the interest rate is
A) a decline in the price level.
B) a decline in income.
C) an increase in the money supply.
D) a decline in the expected inflation rate.

Question

Figure 4.3
 
-In Figure 4.3,the factor responsible for the decline in the interest rate is
A) a decline in the price level. 
B) a decline in income. 
C) an increase in the money supply. 
D) a decline in the expected inflation rate.

Quizplus · Accepted Answer

An increase in the money supply typically leads to a decline in interest rates because more money available means lenders can offer loans at lower rates.

Figure 4.3 -In Figure 4.3,the Factor Responsible for the Decline in the the Decline