According to John Maynard Keynes,
A)the demand for money in a country is determined entirely by that nation's central bank.
B)the supply of money in a country is determined by the overall wealth of the citizens of that country.
C)the interest rate adjusts to balance the supply of,and demand for,money.
D)the interest rate adjusts to balance the supply of,and demand for,goods and services.

Question

Quizplus · Accepted Answer

According to John Maynard Keynes, the interest rate adjusts to balance the supply of and demand for money. This means that the supply of money is not determined solely by the overall wealth of a country's citizens or the central bank, but rather by the interaction of the supply and demand for money in the economy. In order to maintain equilibrium, the interest rate will adjust accordingly.