Use the following to answer questions:
Figure: A Money Market 
-(Figure: A Money Market) Refer to Figure: A Money Market. If the interest rate is r3, the interest rate will _____ because there is a _____ of money in the market.
Definitions:
Effective Annual Rate
The real return on an investment, accounting for the effect of compounding over a period.
Discount
A reduction to the usual price of goods or services, or in finance, the difference between the face value of a bond and its selling price.
Forego Discount
Choosing not to take advantage of early payment discounts offered by suppliers or creditors.
Costly Trade Credit
Refers to the high cost associated with the short-term financing obtained by buyers from suppliers when they choose to delay payment.
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