Supply of money remaining the same when there is an increase in demand for money, there will be:
Detailed Explanation:
When money supply is constant and demand for money increases, there is greater competition for the available money in the economy.
According to the Liquidity Preference Theory, banks and lenders respond by raising the interest rate to equilibrate the money market—higher rates reduce money demand and attract more deposits, restoring balance between supply and demand.
Question 16 of 17 Monetary Policy
Practice PYQ questions from this topic across all years
In the context of Indian economy, Open Market Operations’ refers to:
Which of the following measures would result in an increase in the money supply in th...