If the Nominal Interest Rate Is Above Its Equilibrium Value

question 154

Multiple Choice

If the nominal interest rate is above its equilibrium value, then

• A) people sell financial assets and the interest rate falls.
• B) people buy financial assets and the interest rate falls.
• C) the demand curve for money shifts rightward and the interest rate rises.
• D) the supply curve of money shifts leftward and the interest rate rises.
• E) the demand curve for money shifts leftward and the interest rate falls.

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Definitions:

Scatter Diagram

A graphical representation used in statistics to show the relationship between two variables, using dots to represent data points.

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