-Refer to Figure

question 16

Multiple Choice

-Refer to Figure . Assume the Fed is targeting a particular level of money supply (M_t) as measured by one of the monetary aggregates. If money demand increases from D to D', what will happen if the Fed continues to leave the money supply unchanged?

• A)The interest rate will rise.
• B)The interest rate will fall.
• C)The money demand curve will shift leftward.
• D)The money supply curve will increase.

---

Definitions:

Innovation-Driven Economy

An economic structure primarily based on innovative activities and the continuous development of new products, services, and technologies.

Italy

A country located in southern Europe, known for its rich history, cultural heritage, and significant contributions to art, food, and fashion.

India

A country in South Asia, known for its diverse culture, historical landmarks, and rapidly growing economy.

Lifestyle Entrepreneur

Person who starts a business to reduce work hours and create a more relaxed lifestyle.