If the Quantity of Money Demanded Exceeds the Quantity of Money

question 118

Multiple Choice

If the quantity of money demanded exceeds the quantity of money supplied at a given interest rate,what will happen to restore the market to equilibrium?

• A) The public will try to buy bonds,the price of bonds will increase,and the interest rate will fall until equilibrium is attained where the money demand and supply curves intersect at the market interest rate.
• B) The public will try to sell bonds,the price of bonds will decrease,and the interest rate will rise until equilibrium is attained where the money demand and supply curves intersect at the market interest rate.
• C) The public will try to sell bonds,the price of bonds will increase,and the interest rate will fall until equilibrium is attained where the money demand and supply curves intersect.
• D) The public will try to buy bonds,the price of bonds will increase,and the interest rate will rise until equilibrium is attained where the money demand and supply curves intersect.
• E) The public will try to buy bonds,the price of bonds will decrease,and the interest rate will fall until equilibrium is attained where the money demand and supply curves intersect.

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Definitions:

Sociologists

Social scientists who study human societies, their interactions, and the processes that preserve and change them, including cultural norms, organizations, and institutions.

Gather Data

The process of collecting information or facts from different sources for a specific purpose, often used in research and analysis.

Replication Study

Research that is repeated exactly, but on a different group of people at a different point in time.

Value-Free Sociology

Value-Free Sociology is a principle advocating for the objectivity of sociologists, arguing that they should study society and social behaviors without allowing their personal biases, beliefs, or values to influence their research.