Question

(xvi) The money supply affects the rate of interest; when the money supply increases,
rate of interest will be decreased. It is explained by
(A) Keynes
(B) Walker
(C) Robbins
(D) Crowther​

Answer 1

Answer:

When the money supply increases it means that more money is available in the economy for borrowing and this increased supply, in line with the law of demand tends to reduce the interest rates, or the price for borrowing money down. Similarly when the money supply decreases, it will tend to push up the interest rates.