FIGURE 27-2 -Refer to Figure 27-2. Suppose the Market Interest Rate Is

question 57

Multiple Choice

FIGURE 27-2
-Refer to Figure 27-2. Suppose the market interest rate is i2. The situation in this market is as follows:

• A) firms and households are attempting to increase their money holdings by selling bonds.
• B) firms and households are attempting to decrease their money holdings by selling bonds.
• C) firms and households are attempting to increase their money holdings by buying bonds.
• D) firms and households are attempting to decrease their money holdings by buying bonds.
• E) the market is in equilibrium and no change will occur.

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