-In the Above Figure, If the Interest Rate Is 8

question 65

Multiple Choice

-In the above figure, if the interest rate is 8 per cent per year, the quantity of money demanded is

• A) greater than the quantity of money supplied, and the demand curve for money will shift.
• B) less than the quantity of money supplied, and the interest rate will change.
• C) greater than the quantity of money supplied, and the supply curve of money will shift.
• D) less than the quantity of money supplied, and the demand curve for money will shift.
• E) greater than the quantity of money supplied, and the interest rate will change.

---

Definitions:

Extra Income Effect

The change in an individual's consumption choices resulting from a change in real income, due to factors other than a direct income increase.

Endowment

The total resources available to an individual or entity, which can include wealth, assets, or resources in an economic context.

Normal Good

A type of good for which demand increases as the income of individuals increases, holding everything else constant.

Wage Rate

The standard amount of compensation given to employees for services rendered, usually expressed per hour or year.