GyanGramQuestion
Supply of money remaining the same when there is an increase in demand for money, there will be:
PRELIMS 2013 · INDIAN ECONOMY
Supply of money remaining the same when there is an increase in demand for money, there w…
Attempt this previous-year question. The correct option stays hidden until you choose.
Pick an option to check yourself.
• Correct Answer: B
• Fixed money supply (vertical curve) intersects with increased money demand (rightward shift), creating excess demand at the original interest rate.
• To meet higher cash demand, economic agents sell bonds; rising bond supply lowers bond prices, pushing interest rates up.
• A, C, D are wrong because with fixed supply, excess demand raises interest rates rather than changing prices or income.
Keep going in GyanGram.
Attempt Prelims MCQs or open Mains questions by paper — then continue the same bank inside the app with visual decks.