Answer the Question on the Basis of the Information in the Following

question 202

Multiple Choice

Answer the question on the basis of the information in the following table. $\begin{array}{c}\begin{array}{c}\\\text {Money}\\\underline{\text { Supply}}\\ \$ 400 \\400\\400\\400\\400\end{array}\begin{array}{c}\\\text { Money }\\\underline{\text { Demanc }} \\ \$ 600 \\500 \\400 \\300 \\200\end{array}\begin{array}{c}\\\text { Interest}\\\underline{\text { Rate }} \\ 2 \% \\3 \\4 \\5 \\6\end{array}\begin{array}{c}\text {Investment }\\\text {(at Interest}\\\underline{\text { Rate Shown) }}\\\$ 700 \\600 \\500 \\300 \\200\end{array}\end{array}$
Refer to the table.An interest rate of 2 percent is not sustainable because:

• A) the demand for bonds in the bond market will fall and the interest rate will fall.
• B) the demand for bonds in the bond market will rise and the interest rate will fall.
• C) the supply of bonds in the bond market will decline and the interest rate will rise.
• D) the supply of bonds in the bond market will rise and the interest rate will rise.