Use the Table Below to Answer the Following Questions

question 72

Multiple Choice

Use the table below to answer the following questions.
Table 24.4.1

-Refer to Table 24.4.1.The spreadsheet provides information about the demand for money in Minland. Column A is the nominal interest rate,r.Columns B and C show the quantity of money demanded at two different levels of real GDP: Y0 is $10 billion and Y1 is $20 billion.
The quantity of money is $3 billion.Real GDP is $20 billion.
If the interest rate is greater than 4 percent a year

• A)people buy bonds, the price of a bond rises, and the interest rate rises.
• B)people buy bonds, the price of a bond rises, and the interest rate falls.
• C)people sell bonds, the price of a bond falls, and the interest rate rises.
• D)people sell bonds, the price of a bond falls, and the interest rate falls.
• E)the demand for money decreases.

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Definitions:

Debtors

Individuals or entities that owe money to others.

Contract Voided

Refers to a contract that has been declared invalid and is therefore unenforceable, as if it had never been made.

Loan Agreement

A contract between a borrower and lender outlining the terms of a loan, including repayment schedule, interest rates, and the obligations of both parties.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money, or the percentage earned on a savings or investment account.