Money, Interest Rates & Output Mcqs

Q.  If there is a general shortage of liquidity in the money market then ?

a. The banks will increase their lending
b. The short-term interest rate at which the economy’s commercial banks lend to and borrow from each other will fall and the central bank may be expect
c. The short-term interest rate at which the economy’s commercial banks lend to and borrow from each other will rise and the long-term interest rate ma
d. the long-term interest rate in the economy will rise and the central bank will raise its interest rate in response
e. The short-term interest rate at which the economy’s commercial banks lend to and borrow from each other will rise and the central bank may be expect


ANSWER: See Answer
 
No explanation is available for this question!
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