If the Interest Rate Is Below the Equilibrium Interest Rate

question 25

Multiple Choice

If the interest rate is below the equilibrium interest rate, how is equilibrium achieved in the money market?

• A)People sell goods to try to raise more money, lowering the price of goods and raising the interest rate.
• B)People buy bonds to get rid of their excess money, raising the price of bonds and raising the interest rate.
• C)People sell bonds to try to raise more money, raising the price of bonds and lowering the interest rate.
• D)People sell bonds to try to raise more money, lowering the price of bonds and raising the interest rate.
• E)People buy goods to get rid of their excess money, lowering the price of goods and raising the interest rate.

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