CFA Practice Question

There are 341 practice questions for this study session.

CFA Practice Question

The vertical money supply curve represents the ______

A. idea that the money supply is increasing in the interest rate.
B. idea that the money supply is decreasing in the interest rate.
C. belief that the central bank has complete control over the money supply.
D. belief that the central bank has no control over the money supply.
E. The money supply curve is not vertical.
Correct Answer: C

A vertical money supply curve implies that the central bank can set the money supply independently of the interest rate.

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