-The Table Above Gives the Quantity of Money and Money

question 212

Multiple Choice

-The table above gives the quantity of money and money demand schedules. Suppose that the interest rate is equal to 3 percent. The effect of this interest rate in the money market is that

• A) the money market is in equilibrium.
• B) people buy bonds and the interest rate falls.
• C) people sell bonds and the interest rate rises.
• D) bond prices rise so that the interest rate rises.

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