Exhibit 20-2  Money Market Demand and Supply Curves as Shown

question 81

Multiple Choice

Exhibit 20-2  Money market demand and supply curves As shown in Exhibit 20-2, assume the money supply curve shifts rightward from MS₁ to MS₂ and the economy is operating along the intermediate segment of the aggregate supply curve. The result will be a:

• A) higher interest rate and no effect on real GDP or the price level.
• B) lower investment, lower real GDP, and lower price level.
• C) higher investment, higher real GDP, and higher price level.
• D) higher investment, lower real GDP, and lower price level.

---

Definitions:

Slack

A workplace communication tool, or in a different context, the amount of time a project can be delayed without causing a delay to subsequent projects.

Time Period

A specific duration or interval of time over which certain events or processes occur or are measured.

Sales Budget

An estimate of future sales, often broken down into units and revenue, used for planning and control purposes within a business.

Budget

An estimation of revenue and expenses over a specified future period of time, used for financial planning and control.