On a Diagram Where the Interest Rate and the Quantity

question 333

Multiple Choice

On a diagram where the interest rate and the quantity of money demanded are shown on the vertical and horizontal axes, respectively, the transactions demand for money can be represented by

• A) a line parallel to the horizontal axis.
• B) a vertical line.
• C) a downsloping line or curve from left to right.
• D) an upsloping line or curve from left to right.

---

Definitions:

Supply

The total amount of a good or service that is available for purchase at any given price point.

Equilibrium Price

The equilibrium price where the supply of goods meets the demand for those goods in the marketplace.

Equilibrium Quantity

The quantity of goods or services supplied that is equal to the quantity demanded at the market price.

Simultaneous Decrease

A situation where two or more economic variables or quantities decline at the same time.