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-In the Above Figure, Suppose the Economy Is Initially on the Demand

question 117

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  -In the above figure, suppose the economy is initially on the demand for money curve MD<sub>1</sub>. What is the effect of a fall in the interest rate? A)  The demand for money curve would shift rightward to MD<sub>2</sub>. B)  There would be a movement upward along the demand for money curve MD<sub>1</sub>. C)  The demand for money curve would shift leftward to MD<sub>0</sub>. D)  There would be a movement downward along the demand for money curve MD<sub>1</sub>.
-In the above figure, suppose the economy is initially on the demand for money curve MD1. What is the effect of a fall in the interest rate?


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