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

question 65

Multiple Choice

-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 nominal interest rate?

• A) There would be a movement downward along the demand for money curve MD₁.
• B) The demand for money curve would shift leftward to MD₀.
• C) There would be a movement upward along the demand for money curve MD₁.
• D) The demand for money curve would shift rightward to MD₂.

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