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31. People might withdraw money from interest-bearing accounts,

a. making the interest rate fall, if there is a surplus in the money market.

b. making the interest rate rise, if there is a surplus in the money market.

c. making the interest rate fall, if there is a shortage in the money market.

d. making the interest rate rise, if there is a shortage in the money market.

User JimN
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Answer:

The correct answer is D. People might withdraw money from interest-bearing accounts, making the interest rate rise, if there is a shortage in the money market.

Step-by-step explanation:

In case of a shortage of money in the economy, where people who need to consume and produce do not have immediate liquid money to carry out their economic activities, individuals will withdraw the money invested in their accounts to have cash to cover their immediate needs. Thus, the level of money in circulation will increase, but at the same time the liquidity of investment accounts will fall, with which banks will tend to raise interest rates to recover investors and therefore cover the losses in their accounts.

User Marutha
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