A) A lower interest rate but the same quantity of money
B) A higher interest rate but the same quantity of money
C) A higher quantity of money but lower interest rates
D) A higher quantity of money but the same interest rate
Correct Answer: B
Solution :
An outward shift in the demand for money, other things being equal should lead to a higher interest rate but the same quantity of money. The supply will not increase but with more demand the price (the interest rate) should increase.
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