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oksian1 [2.3K]
2 years ago
10

How do changes in interest rates affect the money supply?

History
2 answers:
algol132 years ago
5 0

The changes in interest rates affect the money supply because as interest rates fall, people generally hold more cash, restricting the money supply.

<h3>What are the effect of rise and fall of interest rates?</h3>

When there is a fall in interest rates its increases the amount of money people wish to hold while a rise in interest rates leads to a decreases that amount people wish to hold.

Therefore, the Option A is correct

Read more about interest rate

<em>brainly.com/question/20714298</em>

#SPJ2

nekit [7.7K]2 years ago
5 0

Answer:

Option C

Explanation:

Interest rate is directly proportional to mindset of people

  • If it rises people keep holding less money and stop the supply of money to market
  • If it falls people expands the money supply
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