Assume a Fixed Demand for Money Curve and the RBA

question 92

Multiple Choice

Assume a fixed demand for money curve and the RBA decreases the money supply. In response, people will:

• A) sell bonds, thus driving up the interest rate.
• B) sell bonds, thus driving down the interest rate.
• C) buy bonds, thus driving up the interest rate.
• D) buy bonds, thus driving down the interest rate.

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Definitions:

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