If the Interest Rate Is Above the Equilibrium Rate, How

question 51

Multiple Choice

If the interest rate is above the equilibrium rate, how is equilibrium achieved in the money market?

• A)People buy goods to get rid of their excess money, lowering the price of goods and lowering the interest rate.
• B)People sell goods to get rid of their excess money, lowering the price of goods and lowering the interest rate.
• C)People sell bonds to get rid of their excess money, lowering the price of bonds and lowering the interest rate.
• D)People sell bonds to get rid of their excess money, raising the price of bonds and lowering the interest rate.
• E)People buy bonds to get rid of their excess money, raising the price of bonds and lowering the interest rate.