AuthorTopic: Money Supply and Interest Rate
sunrise
@2008-07-11 03:17:40
Holding other things constant, what is the effect of lowering interest rate and decreasing money supply at the same time?

Thanks
yellowbean
@2008-07-14 18:33:44
Not sure what that means exactly. Lowering interest rates is a way of expanding the money supply so I'm not sure what gets held constant. If this is a question in some review guide the answer is probably something like velocity of money increases.

CFA Discussion Topic: Money Supply and Interest Rate

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