Question

Indicate whether the following incidents will increase or decrease the money supply, if other things are equal. Explain also why.

a) True
b) False

Answer 1

To increase the quantity of loans made and received in the financial market, there needs to be a rise in supply of loans.

Step-by-step explanation:

To increase the quantity of loans made and received in the financial market, there needs to be a rise in supply of loans. This means that when the supply of loans by banks or financial institutions increases, more loans will be available for borrowers. Consequently, this will lead to an increase in the quantity of loans made and received.